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Call sheet · Q2'26

Stryker (SYK)

Q2'26 earnings call · held 2026-07-30 · compared with the Q1'26 call · management-credibility review
6/12
Disclosure score
2 high, 4 medium, 1 low flags
Financial quality
Bottom line
The sleeper story is that Stryker has a massive capital equipment delivery surge locked and loaded for H2 that the Street is underestimating, with 'elevated backlog' and 'record Mako' orders that just need production capacity. The 9% organic growth masks both a vascular disaster costing 50-75 bps and a potential capital super-cycle. The binding constraint isn't demand but their ability to manufacture and ship product fast enough, which explains why they raised the floor but cut the ceiling of guidance. Preston's deflection speaks volumes: 'it's hard to really pin down' suggests they genuinely don't know what's recovery versus real growth. My view changes if Q3 shows vascular still negative or capital backlog isn't converting.

The 30-second version

  • The vascular supply disruption is masking a massive capital equipment surge that will dominate H2
  • Q2 organic growth of 9% beat but vascular's supply chain meltdown cost 50-75 bps
  • Management stopped disclosing DSO and working capital metrics while blaming 'variability across businesses'

What changed this quarter

MetricQ1'26Q2'26Change
Organic Sales Growth2.4% (vs 10%+ prior year)9.0% (vs 10%+ prior year)+660 bps sequential acceleration
U.S. Organic Growth1.9%9.0%+710 bps surge from cyber recovery
International Organic Growth3.9%8.9%+500 bps acceleration
Adjusted EPS$2.60 (-8.5% YoY)$3.69 (+17.9% YoY)Massive reversal from Q1 decline
Adjusted Gross Margin63.6% (-190 bps YoY)66.0% (+60 bps YoY)+240 bps sequential improvement
Adjusted Operating Margin21.1% (-180 bps YoY)27.4% (+170 bps YoY)+630 bps sequential surge
MedSurg & Neurotech GrowthNot specifically disclosed9.2% organicStrong recovery across portfolio
Orthopedics GrowthNot specifically disclosed8.6% organicHigh single digit despite cyber impact
U.S. Vascular SalesNot disclosed-6.7% organicSupply chain failure revealed
U.S. Medical GrowthNot disclosed+13.1% organicDouble digit surge on capital

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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