UPDATE: Bank of America Initiates STERIS at Buy on Outlook

Bank of America initiated its coverage on STERIS STE with a Buy rating and a $42 price objective. Bank of America noted, "Rising health care utilization, stemming from an aging demographic, the proliferation of chronic disease, and regulatory reform should support surgical volumes above historical levels, fueling greater demand for STE's offerings. An increasingly diverse product portfolio should enable STE to capture more market share through cross- selling strategies targeting the broader needs of its hospital customers. The US Endoscopy acquisition (5% of annualized revenues) enhances STE's access to the GI space, a rapidly growing, highly profitable niche, while cost cutting efforts should help drive EPS growth." STERIS closed at $35.45 on Wednesday.