Medtronic Reports Strong Q1 Earnings, Yet Underperforms Market
Medtronic plc (MDT), based in Minneapolis, develops and sells medical devices worldwide. With a market capitalization of $115.6 billion, the company operates across four main segments: Cardiovascular, Medical Surgical, Neuroscience, and Diabetes.
Stock Performance Compared to Market
Recently, Medtronic has struggled against broader market trends. Year-to-date, MDT stock has climbed 9.4%, while over the past year, it has risen 22.7%. However, this lags behind the S&P 500 Index, which has surged 24.3% year-to-date and 35.8% over the past 52 weeks.
Furthermore, Medtronic has not kept pace with the iShares U.S. Medical Devices ETF (IHI), which gained 10.8% in 2024 and 26.8% over the last year.
Q1 Earnings Exceed Expectations
Following the release of its Q1 earnings report on August 20, Medtronic’s shares showed slight gains and maintained positive momentum over the next four trading days. The company experienced growth in its diverse health technology products, including Automated Insulin Delivery and Transcatheter Aortic Valve Replacement. Medtronic’s performance surpassed Wall Street’s expectations, with net sales increasing by 2.8% year-over-year to $7.9 billion. Organic revenue grew by an impressive 5.3% compared to the same quarter last year.
Additionally, adjusted earnings per share (EPS) rose 7.5% to $1.29, exceeding analyst estimates by 2.5%. In light of its Q1 success, Medtronic raised its full-year organic revenue growth forecast to between 4.5% and 5%.
Future Expectations and Analyst Ratings
For the fiscal year ending December, analysts project a 4.6% year-over-year growth in adjusted EPS, bringing it to $5.44. Medtronic has consistently surpassed analyst bottom-line estimates over the past four quarters, demonstrating a strong earnings surprise history.
The consensus rating for MDT stock is currently a “Moderate Buy.” Among 29 analysts, 10 recommend a “Strong Buy,” two suggest a “Moderate Buy,” 15 advise to “Hold,” and two indicate a “Strong Sell.”
Changing Analyst Perspectives
This sentiment is slightly more positive compared to three months ago when one analyst rated it a “Moderate Buy,” while three analysts advised a “Strong Sell.”
On October 25, Needham analyst Michael Matson maintained a “Hold” rating on the stock.
The average price target is $94.75, indicating a potential upside of 5.1% from current prices. The highest target of $106 suggests an even greater upside of 17.6%.
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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.
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