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Medtronic (MDT) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Medtronic (MDT) closed at $102.37, marking a +0.42% move from the previous day. This change outpaced the S&P 500's 0.9% loss on the day. Elsewhere, the Dow lost 1.05%, while the tech-heavy Nasdaq lost 0.79%.

Heading into today, shares of the medical device company had gained 3.17% over the past month, outpacing the Medical sector's loss of 3.18% and the S&P 500's gain of 1.52% 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 August 20, 2019. On that day, MDT is projected to report earnings of $1.18 per share, which would represent year-over-year growth of 0.85%. Meanwhile, our latest consensus estimate is calling for revenue of $7.41 billion, up 0.41% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.46 per share and revenue of $31.44 billion. These totals would mark changes of +4.6% and +2.9%, respectively, from last year.

It is also important to note the 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.

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. The Zacks Consensus EPS estimate has moved 0.33% higher within the past month. MDT is currently a Zacks Rank #2 (Buy).

Looking at its valuation, MDT is holding a Forward P/E ratio of 18.66. This represents a discount compared to its industry's average Forward P/E of 27.19.

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 2.55 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 73, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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