Stryker Stock Dropped to Hold After Subpoena

Stryker, one of a few orthopedic companies currently facing federal antitrust investigations, has seen its stock downgraded by Standard & Poor’s Equity Research to “hold” from “buy” on Wednesday, as reported on forbes.com. “We believe investment risks have increased and expect limited near-term upside for Stryker,” wrote S&P Equity Research analyst Robert Gold in a client report. On Monday, Kalamazoo, MI-based Stryker said it received a subpoena from the U.S. Department of Justice, which requested information regarding possible antitrust violations. “In our opinion, investigations likely focus on relationships between orthopedic device makers and physicians which may have been anti-competitive in nature,” wrote Gold. The analyst cut the price target on Stryker to $47 from $53 and said in addition to potential fines, an increase in pricing transparency may negatively affect the industry’s profit margins and earnings growth. Stryker stock was at $42.61 at the end of trading on June 29. Other orthopedic device companies currently facing federal antitrust investigations include Biomet and Zimmer Holdings, both of Warsaw, IN.