We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Medtronic (MDT) Stock for Now
Read MoreHide Full Article
Medtronic plc (MDT - Free Report) is well-poised for growth in the coming quarters, backed by the performance of the Cardiovascular portfolio. The company ended the fiscal fourth quarter with better-than-expected earnings and revenues. Medtronic’s largest businesses — Cardiac Rhythm, Surgical and Spine plus ENT — laid a strong foundation for the company’s growth in the quarter. However, escalated expenses do not bode well for MDT.
In the past year, this Zacks Rank #3 (Hold) stock has decreased 17.6% compared with the industry’s 33.8% fall and a 2.3% rise of the S&P 500 composite.
The renowned medical device company has a market capitalization of $108.4 billion. Medtronic has an earnings yield of 6.27% against the industry’s yield of -2.37%. The company’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 1.57%.
Let’s delve deeper.
Tailwinds
Impressive Q4 Performance: Medtronic recorded an earnings and revenue beat in the fiscal fourth quarter. Growth across the company was driven by procedure volume recovery, supply improvements and innovative product introductions.
Image Source: Zacks Investment Research
MDT’s organic revenues reflected strong performances in the Cardiovascular, Medical Surgical and Neuroscience portfolios and across Diabetes markets outside the United States. The company received the CE Mark for the Affera mapping and ablation system and FDA approval for the MiniMed 780G system with a Guardian 4 sensor. Medtronic recently announced a strategic collaboration with NVIDIA and Cosmo Pharmaceuticals to accelerate AI innovation for healthcare.
Neurosurgery Portfolio’s Strong Growth Prospects: Within Medtronic’s Neuroscience portfolio, Cranial and Spinal Technologies’ growth was driven by Core Spine growth globally. Domestic growth banked on the continued adoption of the market-leading Aible spine technology ecosystem.
Growth in Neuromodulation was driven by mid-single-digit growth in Pain Stim on increased therapy trials and market recovery. Specialty Therapies demonstrated broad-based strength on low-double-digit growth in Neurovascular and ENT and mid-single-digit growth in Pelvic Health.
Market Share Gain Within Cardiovascular Continues: Within Structural Heart, Medtronic won the Transcatheter Aortic Valve Replacement (TAVR) share in the United States on the strength of Evolut FX. It combines industry-leading durability with enhanced and predictable valve deployment.
The Cardiac Rhythm & Heart Failure division’s results were driven by growth in Micra transcatheter pacing systems and the LINQ family of insertable cardiac monitors. Cardiac ablation solutions grew 5% and made significant advances in the company’s pipeline during the quarter.
Downside
Mounting Expenses Strain Margins: In the fiscal fourth quarter, the gross margin contracted due to a 15% rise in the cost of revenues. The quarter also witnessed increased SG&A expenses, causing a 114-basis point contraction in the adjusted operating margin.
Estimate Trend
Medtronic has been witnessing a negative estimate revision trend for 2023. The Zacks Consensus Estimate for 2023 earnings per share (EPS) has moved from $5.23 to $5.18 in the past 30 days and to $5.11 in the past seven days.
The consensus estimate for the company’s 2023 revenues is pegged at $32.3 billion. This suggests a 1.9% rise from the year-ago reported number.
Zimmer Biomet has an earnings yield of 5.72% compared to the industry’s yield of -2.31%. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.38%. Its shares have increased 6% against the industry’s 32.2% decline in the past year.
Penumbra, sporting a Zacks Rank of #1 at present, has an estimated growth rate of 64.1% for 2024. The company’s shares have risen 120% against the industry’s 0.7% decrease over the past year.
PEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 109.4%.
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 4.84% compared to the industry’s yield of -7.06%. Shares of HOLX have risen 5.4% against the industry’s 0.7% rise over the past year.
The company’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 27.3%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Retain Medtronic (MDT) Stock for Now
Medtronic plc (MDT - Free Report) is well-poised for growth in the coming quarters, backed by the performance of the Cardiovascular portfolio. The company ended the fiscal fourth quarter with better-than-expected earnings and revenues. Medtronic’s largest businesses — Cardiac Rhythm, Surgical and Spine plus ENT — laid a strong foundation for the company’s growth in the quarter. However, escalated expenses do not bode well for MDT.
In the past year, this Zacks Rank #3 (Hold) stock has decreased 17.6% compared with the industry’s 33.8% fall and a 2.3% rise of the S&P 500 composite.
The renowned medical device company has a market capitalization of $108.4 billion. Medtronic has an earnings yield of 6.27% against the industry’s yield of -2.37%. The company’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 1.57%.
Let’s delve deeper.
Tailwinds
Impressive Q4 Performance: Medtronic recorded an earnings and revenue beat in the fiscal fourth quarter. Growth across the company was driven by procedure volume recovery, supply improvements and innovative product introductions.
Image Source: Zacks Investment Research
MDT’s organic revenues reflected strong performances in the Cardiovascular, Medical Surgical and Neuroscience portfolios and across Diabetes markets outside the United States. The company received the CE Mark for the Affera mapping and ablation system and FDA approval for the MiniMed 780G system with a Guardian 4 sensor. Medtronic recently announced a strategic collaboration with NVIDIA and Cosmo Pharmaceuticals to accelerate AI innovation for healthcare.
Neurosurgery Portfolio’s Strong Growth Prospects: Within Medtronic’s Neuroscience portfolio, Cranial and Spinal Technologies’ growth was driven by Core Spine growth globally. Domestic growth banked on the continued adoption of the market-leading Aible spine technology ecosystem.
Growth in Neuromodulation was driven by mid-single-digit growth in Pain Stim on increased therapy trials and market recovery. Specialty Therapies demonstrated broad-based strength on low-double-digit growth in Neurovascular and ENT and mid-single-digit growth in Pelvic Health.
Market Share Gain Within Cardiovascular Continues: Within Structural Heart, Medtronic won the Transcatheter Aortic Valve Replacement (TAVR) share in the United States on the strength of Evolut FX. It combines industry-leading durability with enhanced and predictable valve deployment.
The Cardiac Rhythm & Heart Failure division’s results were driven by growth in Micra transcatheter pacing systems and the LINQ family of insertable cardiac monitors. Cardiac ablation solutions grew 5% and made significant advances in the company’s pipeline during the quarter.
Downside
Mounting Expenses Strain Margins: In the fiscal fourth quarter, the gross margin contracted due to a 15% rise in the cost of revenues. The quarter also witnessed increased SG&A expenses, causing a 114-basis point contraction in the adjusted operating margin.
Estimate Trend
Medtronic has been witnessing a negative estimate revision trend for 2023. The Zacks Consensus Estimate for 2023 earnings per share (EPS) has moved from $5.23 to $5.18 in the past 30 days and to $5.11 in the past seven days.
The consensus estimate for the company’s 2023 revenues is pegged at $32.3 billion. This suggests a 1.9% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Zimmer Biomet (ZBH - Free Report) , Penumbra (PEN - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Zimmer Biomet has an earnings yield of 5.72% compared to the industry’s yield of -2.31%. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.38%. Its shares have increased 6% against the industry’s 32.2% decline in the past year.
ZBH sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penumbra, sporting a Zacks Rank of #1 at present, has an estimated growth rate of 64.1% for 2024. The company’s shares have risen 120% against the industry’s 0.7% decrease over the past year.
PEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 109.4%.
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 4.84% compared to the industry’s yield of -7.06%. Shares of HOLX have risen 5.4% against the industry’s 0.7% rise over the past year.
The company’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 27.3%.