Overview of the MedTech Sector#
Medical technology (MedTech) stocks have been under pressure in recent years, and analysts at Piper Sandler believe that a recovery for the sector may still be several quarters away. This potential turnaround is expected to align with a downturn in the domestic economy.
Key Factors Supporting Selected Stocks#
Despite the tough market conditions, Piper Sandler highlights several factors that are currently supporting certain MedTech companies. These include exposure to consumer spending, strong free cash flow (the cash a company generates after accounting for capital expenditures), and low levels of debt. The firm suggests that investors should focus on large-cap companies, which are well-established firms with a market capitalization of over $10 billion.
Featured Stock: DexCom#
Piper Sandler rates DexCom as Overweight, indicating a positive outlook, with a price target of $75. This valuation is based on the company's estimated sales for fiscal year 2026 and assumes a net cash position of about $758 million. DexCom has performed well this year, but it faces risks such as regulatory approval challenges and competition from other products. Recently, the company reported fourth-quarter 2025 revenue of $1.26 billion, exceeding analyst expectations, and appointed Google executive Rick Osterloh to its Board of Directors.
Featured Stock: Steris#
Steris also receives an Overweight rating from Piper Sandler, with a price target of $300. This target is based on expected earnings per share for the next twelve months. Steris aligns with Piper Sandler’s preference for large-cap companies and has shown strong financial health and cash flow generation. However, it faces risks related to fluctuations in procedure volumes and supply chain challenges. In its recent fiscal third-quarter 2026 results, Steris reported a slight revenue increase and announced a quarterly dividend of $0.63 per share.
Both DexCom and Steris are seen as strong candidates in the current MedTech landscape, reflecting the characteristics that Piper Sandler believes are advantageous as the sector continues to face challenges.