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Ireland-based Medtronic plc (MDT) manufactures and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients. Valued at a market cap of almost 111 billion, the company innovates solutions that treat more than 70 health conditions, ranging from Parkinson's to diabetes.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and Medtronic fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, stability, and influence in the healthcare sector. The company distinguishes itself as one of the biggest medical tech companies in the world, operating in more than 150 countries and employing over 95,000 people.
MDT is currently trading 6.6% below its 52-week high of $92.68, reached on Oct. 24. Shares of Medtronic declined nearly 3.7% over the past three months, significantly lagging behind the broader S&P 500 Index’s ($SPX) 9.4% gains during the same time frame.
Moreover, over the past 52 weeks, MDT has gained 7.2%, significantly underperforming SPX’s 31.7% return over the same time frame. On a YTD basis, shares of MDT are up 4%, massively lagging behind SPX’s 26.8% gains.
To confirm its bearish trend, MDT has been trading below its 50-day moving average since early November. However, the stock has been trading above its 200-day moving average since late November.
On Nov. 19, MDT released its Q2 earnings results. The company’s adjusted earnings slightly improved by nearly 1% to $1.26 per share and exceeded the Wall Street estimates of $1.24, while its revenue of $8.4 billion climbed 5.3% from a year ago and outpaced the forecasted figure by 1.7%. Despite delivering a better-than-expected performance, shares of MDT fell almost 3% on that day.
MDT’s underperformance looks even more pronounced when compared to its rival, Abbott Laboratories (ABT), which delivered a 10.9% gain over the past 52 weeks and 5.7% return on a YTD basis.
Despite Medtronic’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 28 analysts covering it, and the mean price target of $94.61 suggests a modest 10.4% premium to its current levels.
