Sotera Health (NASDAQ:SHC) stock gained about 71% in Monday’s after-market trading session. The upside came after the company’s subsidiary, Sterigenics, agreed to pay $408 million to settle more than 870 pending cases. The company’s attempts to resolve legal disputes and reach a settlement may have made investors happy, causing a spike in the share price.
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These cases alleged that the company’s Willowbrook sterilization plant released ethylene oxide (“EO”), which has the potential to cause cancer and other diseases.
Sterigenics plans to pay the settlement amount by funding an escrow account by May 1, 2023. Further, it will undertake incremental debt financing in the first half of 2023 to pay a considerable portion of the agreed amount.
Is SHC a Buy Stock?
SHC stock has a Hold consensus rating based on one Buy, two Holds, and two Sells. The average price target of $7 indicates 19% downside potential over the next 12 months.
