According to analysts’ estimate, Medtronic (MDT) has the potential to return ~13.9% over the next 12 months. Medtronic’s 12-month targeted price stands at $85.9 per share—compared to $75.42 on March 30, 2016. Based on recommendations received from 27 brokerage firms in a Bloomberg survey, the consensus rating for Medtronic is “buy” from 77.8% of analysts. It’s important to note that 22.2% of the analysts provided the company with a “hold” rating. None of the brokers rated Medtronic a “sell.”
According to Bloomberg’s survey of 28 analysts as on March 30, 2016, 61% of the analysts issued a “buy” rating for St. Jude (STJ), whereas 39% of them suggested that the stock is a “hold.”
According to Bloomberg’s consensus ratings from 20 analysts dated March 30, 2016, 55% of the analysts recommended that Becton Dickinson (BDX) should be a “buy,” whereas 45% of them recommended a “hold” rating for the company. None of the analysts rated the stock as a “sell.”
Bloomberg’s consensus of 30 analysts on March 14, 2016, indicated that 60% of the analysts issued a “buy” rating for Stryker (SYK), whereas 33% of them recommended the stock should be a “hold.” The remaining 7% issued a “sell” rating for Stryker.
The revenue estimates fell short of expectations in fiscal 3Q16. The EPS (earnings per share) met analysts’ estimates. Analysts estimated revenue of ~$6.99 billion in 3Q16. The actual revenue was ~$6.93 billion. The company’s adjusted EPS was reported to be $1.06. It was the same as analysts’ estimates for the quarter. The company’s stock price was impacted by the deviation of the actual results from the estimates.
The strong US dollar compared to other international currencies, slower growth in the industrial end markets, Covidien’s integration costs, and debt on the balance sheet are expected to weigh down the company’s valuations and growth. However, the strength of the company’s product portfolio and the geographical and segment-wise product profile, high free cash flows, and strong business are expected to outweigh the risks. Analysts expect Medtronic to manage the risks efficiently.
Investors can consider ETFs such as the Vanguard Dividend Appreciation ETF (VIG). VIG holds ~2.6% of its total assets in Medtronic.