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Minneapolis, Minnesota-based Medtronic plc (MDT) develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. With a market cap of $115.6 billion, Medtronic operates through Cardiovascular, Medical Surgical, Neuroscience and Diabetes segments.
Medtronic has lagged behind the broader market over the past year. MDT stock is up 9.4% on a YTD basis and 22.7% over the past year compared to the S&P 500 Index’s ($SPX) surge of 24.3% on a YTD basis and 35.8% over the past 52 weeks.
Narrowing the focus, Medtronic has also underperformed the iShares U.S. Medical Devices ETF’s (IHI) 10.8% gains in 2024 and 26.8% returns over the past year.
Shares of Medtronic rose marginally and maintained a positive momentum for the next four trading sessions after the release of its better-than-expected Q1 earnings on Aug. 20. The medical device manufacturer has observed growth across its diversified health tech portfolio, including Automated Insulin Delivery, Transcatheter Aortic Valve Replacement, etc. It surpassed Wall Street’s topline and bottom-line estimates, bolstering investor confidence. The company reported a 2.8% year-over-year growth in net sales to $7.9 billion, with its organic revenues surging 5.3% compared to the year-ago quarter.
Additionally, its adjusted EPS grew 7.5% to $1.29 compared to the year-ago quarter, exceeding Wall Street’s estimates by a notable 2.5%. Observing the Q1 results, Medtronic improved its full-year organic revenue growth guidance to 4.5% to 5%.
For the current fiscal year, ending in December, analysts expect MDT to report a 4.6% year-over-year growth in adjusted EPS to $5.44. Moreover, the company has a robust earnings surprise history. It has surpassed Wall Street’s bottom-line estimates in each of the past four quarters.
MDT has a consensus “Moderate Buy” rating overall. Among the 29 analysts covering the stock, 10 advise “Strong Buy,” two suggest “Moderate Buy,” 15 advocate “Hold,” and two recommend a “Strong Sell” rating.
This configuration is slightly more bullish than three months ago when one analyst recommended a “Moderate Buy,a” and three advised a “Strong Sell” rating.
On Oct. 25, Needham analyst Michael Matson maintained a “Hold” rating on the stock.
The mean price target of $94.75 represents a premium of 5.1% to current price levels. Meanwhile, the street-high target of $106 suggests a potential upside of 17.6%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
