Back to top

Image: Bigstock

Medtronic (MDT) Outpaces Stock Market Gains: What You Should Know

Read MoreHide Full Article

Medtronic (MDT - Free Report) closed at $119.99 in the latest trading session, marking a +1.7% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.5%. Meanwhile, the Dow gained 1.44%, and the Nasdaq, a tech-heavy index, added 2.1%.

Coming into today, shares of the medical device company had gained 2.7% in the past month. In that same time, the Medical sector gained 0.34%, while the S&P 500 gained 0.54%.

Wall Street will be looking for positivity from MDT as it approaches its next earnings report date. This is expected to be February 18, 2020. On that day, MDT is projected to report earnings of $1.38 per share, which would represent year-over-year growth of 6.98%. Meanwhile, our latest consensus estimate is calling for revenue of $7.82 billion, up 3.59% from the prior-year quarter.

MDT's full-year Zacks Consensus Estimates are calling for earnings of $5.60 per share and revenue of $31.53 billion. These results would represent year-over-year changes of +7.28% and +3.17%, respectively.

It is also important to note the 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MDT currently has a Zacks Rank of #3 (Hold).

In terms of valuation, MDT is currently trading at a Forward P/E ratio of 21.07. This valuation marks a discount compared to its industry's average Forward P/E of 27.59.

It is also worth noting that MDT currently has a PEG ratio of 2.87. 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. The Medical - Products industry currently had an average PEG ratio of 2.73 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 76, putting it in the top 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MDT in the coming trading sessions, be sure to utilize

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Medtronic PLC (MDT) - free report >>

Published in