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Medtronic (MDT) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Medtronic (MDT) closed the most recent trading day at $96.76, moving -1.16% from the previous trading session. This change lagged the S&P 500's 0.7% loss on the day. Meanwhile, the Dow lost 0.92%, and the Nasdaq, a tech-heavy index, added 0.51%.

Investors will be hoping for strength from MDT as it approaches its next earnings release, which is expected to be May 21, 2020. On that day, MDT is projected to report earnings of $1.13 per share, which would represent a year-over-year decline of 26.62%. Our most recent consensus estimate is calling for quarterly revenue of $7.30 billion, down 10.43% from the year-ago period.

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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 11.67% lower. MDT is currently a Zacks Rank #4 (Sell).

Investors should also note MDT's current valuation metrics, including its Forward P/E ratio of 19.35. This represents a discount compared to its industry's average Forward P/E of 32.38.

Also, we should mention that MDT has a PEG ratio of 2.73. 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 4.14 based on yesterday's closing prices.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 39, which puts it in the top 16% 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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