While the biotech sector may get the most attention under the broader healthcare umbrella, investors should also give some love to medtech stocks. The companies behind these securities offer the potential for hugely positive outcomes for patients overall.
Essentially, the sector enjoys decent growth projections despite being a relatively mature industry: According to BCC Research, the global medical device tech ecosystem reached a valuation of $639.1 billion in 2021. Experts predict that the sector could be worth $953.4 billion by 2027, which would represent a compound annual growth rate (CAGR) of 7.1%.
So even if the ideas below have already proven successful, they could be guaranteed further growth. With that in mind, here are some compelling medtech stocks to consider:
Johnson & Johnson (JNJ)
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Based in New Brunswick, New Jersey Johnson & Johnson (New York Stock Exchange:J.N.J.(J&J) technically falls into the pharmaceutical manufacturing category. But J&J is also a leading player in medical technology. According to the company's public profile, the company offers a variety of solutions, including electrophysiology products to treat cardiac arrhythmias. It also offers neurovascular care to treat hemorrhagic and ischemic strokes.
Analysts rate JNJ stock a Moderate Buy as a consensus, with an average target price of $175.21. The most optimistic forecast is for $215 per share. The company's earnings performance has not been as stellar, but it has generally been solid. From the second quarter of last year through the first quarter of 2024, J&J delivered a positive earnings surprise of 1.6%, which includes a missed forecast in the second quarter.
In the past 12 months (Ten …), the healthcare giant posted net income of $17.07 billion on sales of $85.68 billion. For fiscal year 2024, coverage experts expect earnings per share to grow 7.36% to $10.65. Additionally, sales could grow nearly 4% to $88.35 billion, with an upper target of $89.29 billion.
Combined with a forward dividend yield of 3.37%, JNJ is one of the best medtech stocks to buy.
Intuitive Surgical (ISRG)
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Headquartered in Sunnyvale, California Intuitive surgery (Nasdaq:international) operates in the medical devices and supplies sector. According to the company profile, Intuitive develops, manufactures and sells products that help physicians and healthcare professionals improve the quality and access to minimally invasive treatments. The company is best known for its da Vinci surgical system, which focuses on minimally invasive approaches.
Analysts rate ISRG shares a consensus Strong Buy, with an average price target of $427.93. This doesn't imply a huge upside, but the most optimistic target is $475 per share. Wall Street experts cite Intuitive's consistency as one factor justifying the support: the company has posted an average positive earnings surprise of 6.2% over the past four quarters since Q1 2024.
In the TTM period, net income reached $1.99 billion on sales of $7.32 billion. Analysts expect bottom line earnings to grow 10% in fiscal 2024, resulting in EPS of $6.28. For sales, they target $8.02 billion, which would imply growth of 12.5%. Looking ahead to fiscal 2025, sales could grow 15.8% to $9.28 billion. Thus, ISRG is one of the hottest medical technology stocks to consider.
Striker (SYK)
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Originally from Portage, Michigan. striker (New York Stock Exchange:S.Y.K.) is primarily focused on its Orthopedic and Spine business segment, which provides implants used in total joint replacement procedures. Additionally, the company also has a Surgical and Neurotechnology division, which provides surgical instruments and surgical navigation systems, as well as endoscopy and communication systems.
Analysts have rated SYK shares a Strong Buy by consensus, with an average price target of $382.06, suggesting upside potential of about 14%. Additionally, the upper limit target has risen to $406 per share. Analysts seem reassured by this support due to Stryker's consistency. Over the past four quarters, beginning with Q1 2024, the company's average positive earnings surprise was 5.03%.
During the TTM period, net income was $3.36 billion and sales were $20.96 billion. Analysts expect bottom line earnings to grow 12.8% in FY2024, with EPS reaching $11.96. Sales could reach $22.31 billion, or 8.9% growth year-over-year. In FY2025, sales could rise again to $24.04 billion, reaching the blue sky target of $24.41 billion. Therefore, it's one of the medical technology stocks to consider.
Publication date, Josh Enomoto Did not have, directly or indirectly, any positions in the securities mentioned in this article. Opinions expressed in this article are solely those of the author, copyright InvestorPlace.com. Publication Guidelines.
