The robotics market is leading the automation revolution, driven by groundbreaking innovations in AI, machine learning, collaborative robots, enhanced safety features, and autonomous systems. With such rapid advancements, investing in this market presents a compelling opportunity for substantial growth.
These advancements are reshaping industries such as air defense, as well as the MedTech and medical sectors, boosting productivity, bridging skill gaps, and revolutionizing healthcare. In this evolving landscape, investors might want to consider strong robotics stocks that are driving this transformation: RTX Corporation (RTX), Stryker Corporation (SYK), and Medtronic plc (MDT).
The robotics revolution is reshaping air defense, leveraging AI in soldier training, aerial vehicles (UAVs), and logistics to boost combat effectiveness and cybersecurity. With enhanced drones, autonomous systems, and EMP tech, modern defense becomes more agile, boosting optimism in the robotics sector. The global robotics market is set to grow at a 14.7% CAGR, reaching $283.19 billion by 2032.
Furthermore, robotics is transforming healthcare by enabling precise surgeries, speeding diagnoses, enhancing mobility, supporting rehabilitation, and increasing accessibility through telemedicine. These innovations boost patient care and market growth. As a result, this year, the global medical service robotics market reached $11.2 billion and is expected to grow to nearly $21 billion by 2028.
Considering these trends, let’s assess the fundamentals of the abovementioned robotics stocks.
RTX Corporation (RTX)
RTX is an aerospace and defense company that provides systems and services for commercial, military, and government customers internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon.
On October 15, 2024, RTX’s Raytheon achieved full-rate production approval for its SM-3 Block IIA missile, marking a key milestone in its missile defense partnership with Japan.
On October 10, 2024, RTX’s Raytheon was awarded a $736 million U.S. Navy contract to produce AIM-9X Sidewinder missiles, enhancing short-range missile defense capabilities.
In terms of the trailing-12-month levered FCF margin, RTX’s 12.99% is 98.4% higher than the 6.55% industry average. Likewise, its 3.28% trailing-12-month Capex / Sales is 13.3% higher than the 2.89% industry average.
RTX’s sales for the second quarter ending June 30, 2024, increased 7.7% from the year to $19.72 billion. Its adjusted net income attributable to common shareholders remained flat year-over-year at $1.90 billion, while its EPS rose 9.3% year-over-year to $1.41. Additionally, the company’s free cash flow increased significantly from the previous year to $2.20 billion.
Street expects RTX’s EPS and revenue for the quarter ended September 30, 2024, to increase 7.1% and 47.2% year-over-year to $1.34 and $19.82 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters. The stock has gained 70.2% over the past year to close the last trading session at $125.75.
RTX’s POWR Ratings reflect strong fundamentals. It has an overall rating of B, translating to a Buy in our proprietary system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It is ranked #19 out of 73 stocks in the Air/Defense Services industry. It has a B grade for Growth, Momentum, and Sentiment. To see RTX’s Value, Stability, and Quality ratings, click here.
Stryker Corporation (SYK)
SYK operates as a medical technology company. The company operates through two segments: MedSurg and Neurotechnology, and Orthopaedics and Spine.
On October 1, 2024, SYK completed the acquisition of Vertos Medical, enhancing its non-surgical interventional pain management solutions for chronic lower back pain.
Andy Pierce, Group President of MedSurg and Neurotechnology, at SYK, said, “The acquisition of Vertos Medical enhances our unique, non-surgical solutions for interventionalists addressing chronic lower back pain, while broadening our presence in ambulatory surgery centers.”
On August 17, 2024, SYK completed its acquisition of care.ai, expanding its healthcare IT offerings with AI-assisted virtual care and smart room technology solutions.
In terms of the trailing-12-month EBIT margin, SYK’s 20.71% is 679.3% higher than the 2.66% industry average. Similarly, its 0.56x trailing-12-month asset turnover ratio is 35.9% higher than the 0.41x industry average. Moreover, its 10.29% trailing-12-month levered FCF margin is 639.8% higher than the 1.39% industry average.
In the second quarter that ended on June 30, 2024, SYK’s net sales increased 8.5% year-over-year to $5.42 billion. Likewise, its adjusted gross profit grew 9.1% from the year-ago value to $3.48 billion.
SYK’s adjusted operating income was $1.33 billion, an increase of 9.7% from the previous year’s period. In addition, the company’s net earnings and adjusted EPS amounted to $1.09 billion and $2.81, up 11.2% and 10.6% year-over-year, respectively.
For the quarter ended September 30, 2024, SYK’s EPS and revenue are expected to increase 12.7% and 9.5% year-over-year to $2.77 and $5.37 billion, respectively. SYK surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 33.8% to close the last trading session at $359.73.
SYK’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
SYK has a B grade for Growth, Stability, and Sentiment. It is ranked #30 out of 135 stocks in the Medical – Devices & Equipment industry. Click here to access additional ratings of SYK for Value, Momentum, and Quality.
Medtronic plc (MDT)
Headquartered in Dublin, Ireland, Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. It operates through four segments: Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and The Diabetes Operating Unit segment.
On September 25, 2024, MDT announced the commercial launch of new technologies in its AiBLE spine surgery ecosystem, including software, hardware, and imaging advancements. The company also unveiled a partnership with Siemens Healthineers to integrate advanced imaging solutions for spine care.
On August 7, 2024, MDT announced FDA approval of its Simplera continuous glucose monitor (CGM) and a global partnership with Abbott to expand CGM offerings for diabetes management. This partnership will integrate Abbott’s CGM technology with MDT’s insulin delivery systems.
In terms of the trailing-12-month gross profit margin, MDT’s 65.52% is 13.6% higher than the 57.66% industry average. Its 27.67% trailing-12-month EBITDA margin is 338.3% higher than the 6.31% industry average. Likewise, the stock’s 19.57% trailing-12-month EBIT margin is 636.4% higher than the 2.66% industry average.
MDT’s net sales for its first quarter ended July 26, 2024, increased 2.8% from the prior-year period to $7.92 billion. The company’s non-GAAP operating profit grew 2.3% over the prior-year quarter to $1.95 billion. In addition, its attributable net income rose 31.7% from the year-ago value to $1.04 billion, and its non-GAAP EPS stood at $1.23, up 2.5% year-over-year.
Analysts expect MDT’s revenue for the quarter ending October 31, 2024, to increase 3.7% year-over-year to $8.28 billion. Its EPS for the quarter ending January 31, 2025, is expected to grow 5.5% year-over-year to $1.37. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 23.3% to close the last trading session at $89.79.
MDT’s POWR Ratings reflect robust prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It is ranked #16 in the Medical – Devices & Equipment industry. It has a B grade for Stability and Sentiment. Click here to see MDT’s Growth, Value, Momentum, and Quality ratings.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
RTX shares were trading at $126.03 per share on Friday afternoon, up $0.28 (+0.22%). Year-to-date, RTX has gained 52.49%, versus a 24.08% rise in the benchmark S&P 500 index during the same period.
About the Author: Abhishek Bhuyan
Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More…
