Last week, Sotera Health Co ( SHC ) reported adjusted earnings per share of 14 cents, up from 13 cents a year ago, beating the consensus of 12 cents.

The sterilization solutions and lab testing and advisory services provider reported sales of $254.52 million, up 2.6% year over year (+4.4% at constant currency), beating the consensus of $245.79 million.

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“We are pleased to report a solid start to the year with mid-single digit revenue growth and strong double-digit Adjusted EBITDA growth, on a constant currency basis,” said Chairman and CEO Michael B. Petras Jr. “We have consistently demonstrated the ability to sustain growth and navigate challenges through varying market conditions. Today, we are reaffirming our 2025 outlook as our team remains steadfast in our mission of Safeguarding Global Health.”

Guidance: Sotera Health ( SHC ) affirms fiscal 2025 adj. earnings per share of 70 cents-76 cents versus the consensus of 74 cents.

The company reaffirmed the sales outlook of $1.14 billion-$1.17 billion compared to the consensus of $1.13 billion.

Goldman Sachs writes, “Sotera Health is uniquely insulated from the current Tariff policy, given their largely service-based model and exemptions of their Cobalt-60 supply business under the USMCA.”

Analyst Matthew Sykes upgraded Sotera Health’s rating on Monday to Buy from Neutral and raised the price target to $17 from $14, representing a 36% upside.

Sykes adds that given the uncertain macro backdrop, Sotera Health ( SHC ) represents a defensive growth option within Goldman Sach’s coverage universe without a meaningful impact from tariffs exposure to academia and government exposure.

Sotera Health ( SHC ) is in a strong position despite uncertainty around tariffs, thanks to its service-based business model in Sterigenics and Nelson Labs. Products from Nelson Cobalt are also exempt from tariffs under a U.S. trade rule.

The analyst added that there was significant legal uncertainty when Goldman Sachs began covering the stock with a Neutral rating in December 2024. However, the analyst now believes risk has decreased due to recent settlements.

“We believe SHC is an attractive way to gain exposure to the continued growth in the Medtech product innovation cycle. While potential litigation remains a risk, we believe the uncertainty has reduced following the recent IL settlement, and we expect this risk to lessen over time as they work through the process,” Skyes writes.

SHC Price Action: Solear Health stock is up 5.33% at $13.04 at publication on Monday

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