Stryker Rises As Analyst Raises Rating To 'Buy'

NEW YORK (AP) — Shares of medical device maker Stryker Corp. rose Wednesday after a Deutsche Bank analyst upgraded the stock to "Buy" from "Hold."

Analyst Tao Levy said he thinks orthopedic procedure volumes are holding steady, and results for the MedSurg equipment business will start improving soon after a difficult first half of 2009. He raised his price target on Stryker to $50 per share from $42, and in afternoon trading the stock added $2.11, or 4.9 percent, to $45.46.

He added that Stryker shares are attractively priced.

Levy based his view of the orthopedic market on a survey of 25 surgeons who perform knee and hip implants. He said patients who have put off joint replacement surgeries will have the procedures done over the next year, and Stryker will post stronger growth because its results will be compared against weaker quarters.

Sales of MedSurg equipment should also improve, Levy said, because while hospitals have delayed buying some new instruments during the economic slump, they will eventually need to replace items that are worn out.

Stryker reported $3.97 billion in orthopedic implant sales in 2008, and $2.75 billion in sales of MedSurg equipment.