Medtronic (MDT) is set to release its fiscal 3Q16 earnings results on March 1, 2016. In a Bloomberg survey of 26 brokerage companies as recorded on January 28, 2016, about 76.9% of companies have rated Medtronic as a “buy,” 23.1% have rated the company as a “hold,” and none have rated the company as a “sell.”
The table above lists the 17 brokerage companies that have provided target prices for Medtronic for the next 12 months. The consensus 12-month target price for Medtronic is $87.53, amounting to a 15.9% return compared to the company’s price of $75.49 on January 27, 2016.
Medtronic’s stock movement
As of January 27, 2016, Medtronic’s stock was trading 35.9% above its 52-week low and 5% below its 52-week high. The company’s stock has risen approximately 37.6% over the last two years.
With the acquisition of Covidien, Medtronic has witnessed significant revenue and cost synergies. It’s expected to further outgrow the potential synergy and growth estimates resulting from the acquisition over the coming years.
Though Medtronic continues to witness currency headwinds due to the strong US dollar, it’s expected to create long-term value for shareholders through sustained growth across its product segments and geographies, driven by strategic acquisitions and new innovative products.
Major competitors of Medtronic in the US medical device industry have also witnessed significant rises in their stock prices over the last two years. Becton, Dickinson and Company (BDX) reported a share price rise of ~41.5%, whereas Stryker (SYK) and Boston Scientific (BSX) witnessed ~32.1% and ~30.4% surges in their stock prices, respectively, over the same timeframe.
The iShares US Medical Devices ETF (IHI) tracks the Dow Jones U.S. Select Medical Equipment Index and is representative of the US medical device industry. IHI has risen 27.2% over the last two years. Investors seeking focused exposure to Medtronic can invest in IHI. It has exposure of approximately 15.0% to Medtronic.