What's in the Cards for Medtronic (MDT) in Q1 Earnings?
Medtronic plc MDT is scheduled to report first-quarter fiscal 2023 results on Aug 22, before the opening bell.
In the last reported quarter, the company’s earnings exceeded the Zacks Consensus Estimate by 0.6%. Medtronic surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 1.57%.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Similar to the last reported quarter, Medtronic's business is expected to have registered growth led by procedure volume recovery, supply improvements, and innovative product introductions.
Within the Cardiovascular segment’s cardiac rhythm management, Medtronic’s pacing business continues to outperform the market banking on strong global growth of its Micra leadless pacemaker family as it enters new geographies and expands penetration in existing markets. In May 2023, Medtronic received FDA approval for Micra AV2 and VR2, which extend the battery life by 40% to a projected 16 and 17 years, respectively. ICDs (Implantable cardioverter-defibrillator) within cardiac rhythm management are gaining in terms of market share following the latest CE Mark for the Aurora Extravascular ICD. We believe these developments to have boosted the company’s first-quarter revenues.
Per our model, we project the Medtronic Cardiovascular segment to register growth of 1.9% in Q1.
Within Medtronic’s Neuroscience portfolio, the Cranial Spinal technologies business registered robust growth in recent quarters. In the fiscal fourth quarter, the company's acquisition of Intersect ENT within the Specialty Therapies division in the Neuroscience portfolio contributed positively. We expect these trends to have continued through the fiscal first quarter, thus adding to the top line.
Per our model, we project Medtronic’s Neuroscience segment to register growth of 1.5% in the fiscal first quarter.
Medtronic PLC Price and EPS Surprise
Medtronic PLC price-eps-surprise | Medtronic PLC Quote
Within Medtronic’s MedSurg portfolios, the rollout of differentiated Hugo robotic system in many international markets and the United States will likely drive the company’s revenue within the segment in the to-be-reported quarter. Further, the AI-enabled surgical planning platform for patient-specific spine implants and robotic technologies worldwide are increasingly attracted to Medtronic’s differentiated and innovative solutions. This is expected to have contributed to the company’s growth in fiscal Q1 2024.
Per our model, we project Medtronic’s MedSurg segment to register growth of 5.7% in Q1.
In Diabetes, MDT might have faced some competitive pressure in the United States, where Medtronic lacks the latest products due to regulatory complications. However, the company is expected to have seen significant growth in markets outside the United States of the increasing user base of the MiniMed 780G insulin pump, combined with the Guardian 4 sensor.
According to our model, Medtronic’s overall Diabetes is expected to decline 0.2% in Q1.
Q1 Estimates
The Zacks Consensus Estimate for Medtronic’s fiscal first-quarter total revenues of $7.57 billion suggests a 2.7% rise from the prior-year reported number. The consensus mark for earnings of $1.11 per share implies a 1.8% increase from the year-ago reported figure.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Medtronic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Medtronic has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Medtronic currently carries a Zacks Rank #2.
Stocks Worth a Look
Some better-ranked stocks in the broader medical space are Penumbra, Inc. PEN, Integer Holdings Corporation ITGR and Patterson Companies, Inc. PDCO.
Penumbra, carrying a Zacks Rank of 1 (Strong Buy), reported second-quarter 2023 adjusted EPS of 43 cents, beating the Zacks Consensus Estimate by 53.6%. Revenues of $261.5 million outpaced the consensus mark by 3.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penumbra has an estimated 2024 growth rate of 57.9%. PEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 94.2%.
Patterson Companies has an Earnings ESP of +5.66% and a Zacks Rank of 1. PDCO has an estimated long-term growth rate of 9.2%.
Patterson Companies’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 4.5%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
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Medtronic PLC (MDT) : Free Stock Analysis Report
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