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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 $97.21, moving -1.71% from the previous trading session. This change lagged the S&P 500's daily loss of 0.12%. Elsewhere, the Dow lost 0.04%, while the tech-heavy Nasdaq added 0.32%.

Coming into today, shares of the medical device company had gained 8.31% in the past month. In that same time, the Medical sector gained 3.52%, while the S&P 500 gained 3.31%.

Investors will be hoping for strength from MDT as it approaches its next earnings release. The company is expected to report EPS of $1.18, up 0.85% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.41 billion, up 0.41% from the year-ago period.

MDT's full-year Zacks Consensus Estimates are calling for earnings of $5.46 per share and revenue of $31.44 billion. These results would represent year-over-year changes of +4.6% and +2.9%, respectively.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. MDT is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MDT's current valuation metrics, including its Forward P/E ratio of 18.12. For comparison, its industry has an average Forward P/E of 26.25, which means MDT is trading at a discount to the group.

Investors should also note that MDT has a PEG ratio of 2.54 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MDT's industry had an average PEG ratio of 2.42 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 93, which puts it in the top 37% 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.

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

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