Sotera Health: KeyBanc downgrades stock over litigation overhangs

Sotera Health

26/09/2022 15:03

** KeyBanc brokerage downgrades sterilization and lab
testing firm Sotera Health  SHC.O  to "sector weight" from
"overweight"
    ** Last Monday, SHC's Sterigenics unit was penalized by a
court in Illinois over allegations that emissions from its plant
potentially caused breast cancer in the plaintiff
    ** Broker sees longer timeline in resolution, while there
are several avenues to challenge the verdict
    ** Says "unable to reasonably estimate what the total
liability could be for the remaining cases"
    ** "If liability exceeded a certain threshold we are also
unsure of how SHC would fund it" - KeyBanc
    ** Broker maintains revenue and EBITDA estimate for fiscal
2022 of $1.01 bln and $518 mln, respectively
    ** SHC down 0.8% at $7.78/share in early trade
    ** Two of eight analysts rate the stock "buy" or higher,
five "hold" and one "sell"; their median PT is $22 – Refinitiv
data
    ** YTD, stock has declined 63% as of last close
 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.mishra@thomsonreuters.com))