Stryker Execs Say More M&A Is on the WayStryker Execs Say More M&A Is on the Way

Look for Stryker to become involved in even more deal-making during the second half of 2024. That was the message, Kevin Lobo, the Kalamazoo, MI-based company’s CEO, said during a recent earnings call.

Stryker is just coming off closing its acquisition of Artelon and the acquisition of Molli Surgical.

“We do have a very active deal pipeline,” Lobo said during an earnings call, according to a Seeking Alpha transcript. “Most of them are in the tuck-in variety and most of them are not very large. But you continue to see us be active, as you've seen in the first two quarters of the year, much more active than we were last year. And we will be very active in the second half of the year.”

Lobo added, “It's always hard to predict exactly which deals will land, as you know. But we have a very strong balance sheet now, given the debt that we paid down after Wright and Vocera, and we're going to put our balance sheet to work.”

Lobo’s proclamation comes as Stryker reports a favorable earnings report. The company reported a profit of $2.81 per share for the quarter – which was above consensus estimates of $2.79 per share. The company said part of its growth is because of an uptick in elective surgeries returning to pre-pandemic levels.

“As we talk to surgeons and see their surgery schedules, we see a healthy and sustained good market for hips and knees elevated from pre-pandemic and something that we see through the end of this year and potentially into next year,” Lobo said according to a Seeking Alpha transcript.

Related:Stryker Is Still on the Hunt

Standout segments this quarter include the company’s Mako unit, hips, and neurocranial.   BTIG Analyst Ryan Zimmerman noted that both the procedure dynamics and the potential M&A could help drive growth.

“Stryker expects healthy procedure dynamics sustaining in the second half of 2024 coupled with new product launches (plus a healthy capital backlog),” Zimmerman wrote in research notes. “Further, with Stryker's leverage ratio back at ~2x, we would expect M&A to remain a key contributor to growth.”