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

Zacks Equity Research

Medtronic (MDT) closed the most recent trading day at $107.42, moving +0.63% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.64%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.6%.

Prior to today's trading, shares of the medical device company had lost 1.73% over the past month. This has was narrower than the Medical sector's loss of 3.37% and the S&P 500's loss of 1.87% in that time.

Wall Street will be looking for positivity from MDT as it approaches its next earnings report date. The company is expected to report EPS of $1.28, up 4.92% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.68 billion, up 2.62% from the year-ago period.

MDT's full-year Zacks Consensus Estimates are calling for earnings of $5.56 per share and revenue of $31.50 billion. These results would represent year-over-year changes of +6.51% and +3.09%, 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. MDT is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that MDT has a Forward P/E ratio of 19.19 right now. This represents a discount compared to its industry's average Forward P/E of 25.72.

Investors should also note that MDT has a PEG ratio of 2.62 right now. 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. The Medical - Products was holding an average PEG ratio of 2.47 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% 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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