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Medtronic (MDT) Gains But Lags Market: What You Should Know

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In the latest trading session, Medtronic (MDT - Free Report) closed at $102.55, marking a +0.45% move from the previous day. The stock lagged the S&P 500's daily gain of 0.74%. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq added 1.11%.

Heading into today, shares of the medical device company had gained 4.73% over the past month, outpacing the Medical sector's loss of 2.58% and the S&P 500's gain of 3.18% in that time.

Investors will be hoping for strength from MDT as it approaches its next earnings release, which is expected to be August 20, 2019. In that report, analysts expect MDT to post earnings of $1.18 per share. This would mark year-over-year growth of 0.85%. Our most recent consensus estimate is calling for quarterly revenue of $7.41 billion, up 0.41% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.46 per share and revenue of $31.44 billion. These totals would mark changes of +4.6% and +2.9%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MDT. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.33% higher. MDT is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note MDT's current valuation metrics, including its Forward P/E ratio of 18.69. For comparison, its industry has an average Forward P/E of 27.15, which means MDT is trading at a discount to the group.

It is also worth noting that MDT currently has a PEG ratio of 2.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Medical - Products stocks are, on average, holding a PEG ratio of 2.52 based on yesterday's closing prices.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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