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Medtronic (MDT) Rides on Strong Global Growth, New Launches
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Medtronic’s (MDT - Free Report) major business groups have been reporting consistent market share gains, which highlight sustainability. Its strong global presence is a major positive. The stock carries a Zacks Rank #2 (Buy).
Medtronic is expanding its global foothold within the company’s Cardiovascular business (which contributed more than 37% of the company’s total revenues in fiscal 2023). Within Cardiovascular, cardiac rhythm management, one of Medtronic’s largest businesses, continued to build on the company’s category leadership.
Within cardiac rhythm management, Medtronic’s pacing business has been outperforming the market, banking on strong global growth of its Micra leadless pacemaker family as it enters new geographies and expands in existing markets. In May 2023, Medtronic received FDA approval for Micra AV2 and VR2, which extend the battery life by 40% to 16 and 17 years, respectively.
Medtronic’s Medical Surgical Portfolio is gaining from the sales momentum following the rollout of its differentiated Hugo robotic system in many international markets. The company is also looking to bring Hugo to the United States. We are impressed by Medtronic’s strong prospects in Touch Surgery Enterprise, the AI-powered surgical video and analytics platform. Given the fact that less than 5% of surgical procedures globally are done robotically, Medtronic expects its surgical robotics business to become a meaningful growth driver soon.
Medtronic continues to expand globally. In fiscal 2023, the company generated nearly 48% of its revenues from the rest of the world. The company is now more focused on expansion in emerging markets to address the massively unmet and untapped demand for advanced medical technologies. In the fiscal fourth quarter, non-U.S. developed markets and Western Europe grew 8%. Japan returned to growth following the COVID-19 impacts of fiscal third quarter, growing 5% year over year. Emerging markets (comprising 17% of the company’s fiscal fourth-quarter revenues) returned to double-digit growth in the quarter, growing 11%.
On the flip side, like its peers, Medtronic is currently affected by industry-wide inflationary concerns as a result of increased freight expenses. The company, in this regard, noted that the full impact of inflation on its raw material and direct labor costs would be realized over the next couple of quarters with inventory rolling off the company’s balance sheet, thus affecting gross margin. In the fourth quarter of fiscal 2023, the gross margin declined 285 basis points.
With Medtronic recording a significant portion of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a major dampener over the last few quarters, as in the case of other important MedTech players too. On the fiscal fourth-quarter earnings call, Medtronic noted that adverse currency translation would impact fiscal 2024 adjusted earnings by approximately 6%.
Over the past year, shares of Medtronic have underperformed the industry. The stock has declined 12% compared with 5.9% decline of the industry during this period.
Haemonetics’ stock has risen 23.7% in the past year. Estimates for Haemonetics 2023 earnings have increased from $3.56 to $3.58. Estimates for 2024 have risen from $3.96 to $3.98 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.32%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.07 to $1.19 in the past 30 days. Shares of the company have increased 26% in the past year against the industry’s fall of 3.7%.
DXCM earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 28.83%. In the last reported quarter, it posted an earnings surprise of 54.55%.
Estimates for Intuitive Surgical’s2023 earnings per share have increased from $5.47 to $5.56 in the past 30 days. Shares of the company have increased 29% in the past year against the industry’s fall of 3.8%.
ISRG’s earnings beat estimates in three of the trailing four quarters and missed the same in one, the average surprise being 4.19%. In the last reported quarter, Intuitive Surgicaldelivered an earnings surprise of 7.58%.
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Medtronic (MDT) Rides on Strong Global Growth, New Launches
Medtronic’s (MDT - Free Report) major business groups have been reporting consistent market share gains, which highlight sustainability. Its strong global presence is a major positive. The stock carries a Zacks Rank #2 (Buy).
Medtronic is expanding its global foothold within the company’s Cardiovascular business (which contributed more than 37% of the company’s total revenues in fiscal 2023). Within Cardiovascular, cardiac rhythm management, one of Medtronic’s largest businesses, continued to build on the company’s category leadership.
Within cardiac rhythm management, Medtronic’s pacing business has been outperforming the market, banking on strong global growth of its Micra leadless pacemaker family as it enters new geographies and expands in existing markets. In May 2023, Medtronic received FDA approval for Micra AV2 and VR2, which extend the battery life by 40% to 16 and 17 years, respectively.
Medtronic’s Medical Surgical Portfolio is gaining from the sales momentum following the rollout of its differentiated Hugo robotic system in many international markets. The company is also looking to bring Hugo to the United States. We are impressed by Medtronic’s strong prospects in Touch Surgery Enterprise, the AI-powered surgical video and analytics platform. Given the fact that less than 5% of surgical procedures globally are done robotically, Medtronic expects its surgical robotics business to become a meaningful growth driver soon.
Medtronic continues to expand globally. In fiscal 2023, the company generated nearly 48% of its revenues from the rest of the world. The company is now more focused on expansion in emerging markets to address the massively unmet and untapped demand for advanced medical technologies. In the fiscal fourth quarter, non-U.S. developed markets and Western Europe grew 8%. Japan returned to growth following the COVID-19 impacts of fiscal third quarter, growing 5% year over year. Emerging markets (comprising 17% of the company’s fiscal fourth-quarter revenues) returned to double-digit growth in the quarter, growing 11%.
Medtronic PLC Price
Medtronic PLC price | Medtronic PLC Quote
On the flip side, like its peers, Medtronic is currently affected by industry-wide inflationary concerns as a result of increased freight expenses. The company, in this regard, noted that the full impact of inflation on its raw material and direct labor costs would be realized over the next couple of quarters with inventory rolling off the company’s balance sheet, thus affecting gross margin. In the fourth quarter of fiscal 2023, the gross margin declined 285 basis points.
With Medtronic recording a significant portion of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a major dampener over the last few quarters, as in the case of other important MedTech players too. On the fiscal fourth-quarter earnings call, Medtronic noted that adverse currency translation would impact fiscal 2024 adjusted earnings by approximately 6%.
Over the past year, shares of Medtronic have underperformed the industry. The stock has declined 12% compared with 5.9% decline of the industry during this period.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , DexCom (DXCM - Free Report) and Intuitive Surgical (ISRG - Free Report) . Haemonetics sports a Zacks Rank #1 (Strong Buy), while DexCom and Intuitive Surgical carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ stock has risen 23.7% in the past year. Estimates for Haemonetics 2023 earnings have increased from $3.56 to $3.58. Estimates for 2024 have risen from $3.96 to $3.98 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.32%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.07 to $1.19 in the past 30 days. Shares of the company have increased 26% in the past year against the industry’s fall of 3.7%.
DXCM earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 28.83%. In the last reported quarter, it posted an earnings surprise of 54.55%.
Estimates for Intuitive Surgical’s2023 earnings per share have increased from $5.47 to $5.56 in the past 30 days. Shares of the company have increased 29% in the past year against the industry’s fall of 3.8%.
ISRG’s earnings beat estimates in three of the trailing four quarters and missed the same in one, the average surprise being 4.19%. In the last reported quarter, Intuitive Surgicaldelivered an earnings surprise of 7.58%.