Steris (NYSE: STE) stock was downgraded today by Needham from buy to hold following the $363 million jury verdict against its primary competitor, Sterigenics, over ethylene oxide (EtO) emissions.
Needham analysts said they expect attorneys to target communities near EtO facilities with ads to find people willing to file more lawsuits against sterilization plant operators past and present.
RELATED: EPA flags high-cancer-risk EtO sterilization facilities across the country
The analysts believe Steris can manage any EtO legal liabilities due to the company’s size, diversification and balance sheet, but said investors are looking forward to Steris estimating and reserving cash for potential liabilities.
“Since breast and blood cancers are relatively common, we worry that attorneys could have success in finding additional people willing to file more lawsuits,” the analysts wrote. “We expect the risk of lawsuits and any n…