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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 $89.26, moving -0.44% from the previous trading session. This change lagged the S&P 500's 0.12% loss on the day. Meanwhile, the Dow lost 0.33%, and the Nasdaq, a tech-heavy index, added 0.08%.

Prior to today's trading, shares of the medical device company had lost 7.19% over the past month. This has lagged the Medical sector's loss of 6.93% and the S&P 500's loss of 6.96% in that time.

MDT will be looking to display strength as it nears its next earnings release, which is expected to be February 19, 2019. The company is expected to report EPS of $1.24, up 5.98% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.57 billion, up 2.69% from the prior-year quarter.

MDT's full-year Zacks Consensus Estimates are calling for earnings of $5.13 per share and revenue of $30.56 billion. These results would represent year-over-year changes of +7.55% and +2.02%, respectively.

Investors should also note any recent changes to analyst estimates for MDT. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 0.04% higher. MDT is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note MDT's current valuation metrics, including its Forward P/E ratio of 17.48. This valuation marks a discount compared to its industry's average Forward P/E of 22.25.

Investors should also note that MDT has a PEG ratio of 2.33 right now. 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 2.08 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 100, which puts it in the top 39% 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 Zacks.com.


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