Steris Pushes Through Omicron Wave and Reports Strong Fiscal Q3 Results Led by High-Margin AST

Narrow-moat Steris had a good fiscal third quarter, moderately exceeding both our expectations and consensus aggregated by FactSet. While operating costs were a bit higher than anticipated--due to inflation and acquisition costs--sales growth was strong, and there is no change to our $189 fair value estimate. We attribute the market’s positive reaction to the outperformance and raised outlook, though the quarter’s results don’t have a material impact on the firm’s long-term trajectory in our view, and shares remain overvalued.