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Medtronic (NYSE:MDT) is set to unveil its Q3 FY24 results on Tuesday before the opening bell, as investors anticipate another robust quarter from the Dublin-based medical device maker amidst the continued recovery of the MedTech industry post-pandemic.
MedTech Sector’s Post-COVID Gains
The recent financial performance of MDT’s peers such as Johnson & Johnson (JNJ), Boston Scientific (BSX), Stryker (SYK), and Abbott (ABT) has substantiated the sector’s renewed vitality, with either meeting or surpassing Q4 expectations.
Statements from major health insurers Humana (HUM), UnitedHealth (UNH), and CVS Health (CVS) regarding an unexpected surge in medical procedures lend credence to the optimistic outlook for MedTech as senior citizens resume hospital visits for essential care after the pandemic-imposed restrictions.
Analyst Joshua Jennings of Cowen has expressed confidence in MDT’s growth prospects, assigning an outperform rating and a $90 target on the stock based on the company’s optimistic outlook for a sequential acceleration in underlying sales growth in F4Q, primarily driven by contributions from its new products.
Historical Performance and Future Prospects
MDT has consistently exceeded Wall Street estimates for earnings and revenue, beating quarterly earnings expectations 88% of the time over the past two years, while surpassing revenue forecasts 63% of the time.
The recent regulatory approvals for key products are expected to add significance to the upcoming earnings release in anticipation of their market introduction.
Following the FDA approval for its PulseSelect cardiac ablation system in December, MDT announced plans to launch the product in early 2024. The company is also on track for a phased commercial rollout of MiniMed 780G, a newly introduced insulin pump in its diabetes portfolio, along with the updated Simplera Sync glucose monitoring system in Europe this summer.
Q3 Expectations and Analyst Forecasts
Analysts’ Q3 expectations for Medtronic (MDT) center around $7.95B in revenue, reflecting approximately 3% year-over-year growth, and $1.26 earnings per share, indicating an approximate 3% year-over-year decline.
While MDT has faced several downward revenue forecast revisions in the past three months, analysts have largely maintained or increased their earnings projections, reflecting a degree of optimism in the company’s profit outlook despite revenue uncertainties.
Following the Q2 financials in November, Medtronic (MDT) raised its FY24 adjusted earnings guidance to a range of $5.13–$5.19, in line with consensus, and set its revenue growth forecast at 2.6% on a reported basis, marginally below consensus expectations.
