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

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Medtronic (MDT) closed the most recent trading day at $119.38, moving +0.36% from the previous trading session. This move lagged the S&P 500's daily gain of 0.73%. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq added 1.13%.

Heading into today, shares of the medical device company had gained 0.47% over the past month, lagging the Medical sector's gain of 2.7% and the S&P 500's gain of 2.95% in that time.

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. The company is expected to report EPS of $1.38, up 6.98% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.82 billion, up 3.59% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.60 per share and revenue of $31.53 billion. These totals would mark changes of +7.28% and +3.17%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MDT. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Within the past 30 days, our consensus EPS projection remained stagnant. MDT is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MDT is holding a Forward P/E ratio of 21.24. This valuation marks a discount compared to its industry's average Forward P/E of 26.75.

Meanwhile, MDT's PEG ratio is currently 2.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MDT's industry had an average PEG ratio of 2.77 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 31% 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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