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Medtronic (MDT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Medtronic (MDT) closed at $101.04 in the latest trading session, marking a +1.77% move from the prior day. This move outpaced the S&P 500's daily gain of 1.45%. At the same time, the Dow added 1.22%, and the tech-heavy Nasdaq gained 0.78%.

Coming into today, shares of the medical device company had gained 7.4% in the past month. In that same time, the Medical sector lost 6.04%, while the S&P 500 lost 7.42%.

Investors will be hoping for strength from MDT as it approaches its next earnings release. In that report, analysts expect MDT to post earnings of $1.40 per share. This would mark a year-over-year decline of 9.09%. Meanwhile, our latest consensus estimate is calling for revenue of $7.88 billion, down 3.28% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.44 per share and revenue of $30.72 billion, which would represent changes of +4.21% and +0.54%, respectively, from the prior year.

Any recent changes to analyst estimates for MDT should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 3.54% lower. MDT is currently a Zacks Rank #3 (Hold).

Digging into valuation, MDT currently has a Forward P/E ratio of 18.26. This valuation marks a discount compared to its industry's average Forward P/E of 25.53.

Meanwhile, MDT's PEG ratio is currently 2.58. 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. The Medical - Products industry currently had an average PEG ratio of 2.73 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 36, putting it in the top 15% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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