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What Can Medtronic (MDT) Investors Expect This Earnings Season?

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Although questions are starting to pop up over a number of health care industries, the medical device segment continues to be a strong performer. This area, which includes companies that are focused on a variety of medical products such as stents, catheters and the like, tends to be more stable than many of the drug businesses, though still a vital part of the overall health care industry.

The sector has also been able to navigate the recent health care sector changes with ease and it has maintained a nice history of outperformance. We can see this by looking at Medtronic (MDT - Free Report) which also seen a nice run over the past two years. However, as we note in the chart below, the performance has really just been in-line with the industry at large.

While this was fine for a while, MDT will have to deliver the goods eventually. And with an incredible run to start 2016, this quarter could be a very important one for Medtronic.

This is especially true given the recent estimate trend for MDT shares. Coming into the report earnings estimates have been declining a little bit, and the stock actually was just downgraded into ‘hold’ territory too.

MEDTRONIC Price and Consensus

MEDTRONIC Price and Consensus | MEDTRONIC Quote

But, there shouldn’t be too much of a concern about liking up to expectations, as the company is riding a nice streak in earnings season. In fact, the company hasn’t missed estimates since mid-2014, so it definitely knows how to live up to expectations.

MEDTRONIC Price and EPS Surprise

MEDTRONIC Price and EPS Surprise | MEDTRONIC Quote

Overall, it looks like MDT has a decent chance to beat, but investors shouldn’t expect the world from this stock in the report as estimates haven’t been too great lately. Still, the nice history in earnings season and the very impressive industry rank should help to carry this over the hump for the coming report. But this one, more than most this quarter, will likely be a case where guidance will make or break the stock, and especially considering its market-beating gain to start 2016.

MDT reports before the bell on the 25th. If you’d like more in-depth analysis of Medtronic, make sure to watch our short video on the topic. And for additional insights on trading earnings reports, check out our podcast below:


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