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

Zacks Equity Research

Medtronic (MDT) closed the most recent trading day at $108.50, moving +0.29% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.2%. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq lost 0.3%.

Coming into today, shares of the medical device company had lost 1.05% in the past month. In that same time, the Medical sector lost 1.6%, while the S&P 500 lost 0.25%.

MDT will be looking to display strength as it nears its next earnings release. 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.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MDT is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note MDT's current valuation metrics, including its Forward P/E ratio of 19.45. This represents a discount compared to its industry's average Forward P/E of 26.

Investors should also note that MDT has a PEG ratio of 2.66 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 2.56 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 111, which puts it in the top 44% 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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