We’ll begin this series by looking at Wall Street analysts’ recommendations and target prices for Medtronic (MDT) over the next 12 months.
In a Reuters survey based on the recommendations of 25 brokerage companies, Medtronic was given “buy” ratings by ~76% of analysts. About 24% issued “hold” recommendations, while none issued “sell” recommendations on the stock.
The chart above provides a recommendation summary for Medtronic over the next year. The stock’s consensus 12-month target price is $85.5, which amounts to a ~17% return potential over Medtronic’s price of $73.1 on December 19, 2016.
According to analysts’ most recent recommendations, the lowest one-year target price for Medtronic was $80, implying a return potential of ~9.4% over the next 12 months. On the other hand, Edwards Lifesciences’ highest one-year target price was $96, implying a ~31.3% return potential over the next 12 months.
Peers Abbott Laboratories (ABT), Zimmer Biomet Holdings (ZBH), and Becton, Dickinson and Company (BDX) have average broker target prices of ~$85.5, $47.4, and $27.7, respectively. These figures imply returns of 16.5%, 20%, and 29.6%, respectively, over the next 12 months.
ETFs with exposure to Medtronic
Investors interested in gaining focused exposure to Medtronic can consider investing in the iShares US Medical Devices ETF (IHI). IHI has 11.8% of its total holdings in Medtronic. It’s one of the largest US medical device ETFs, and it tracks the Dow Jones US Select Medical Equipment Index.
You may also want to consider investing in healthcare sector ETFs such as the Health Care Select Sector SPDR ETF (XLV) for exposure to MDT. XLV has ~3.8% of its total holdings in MDT. For diversified exposure, and to reduce company-specific risks, you can also check out the Vanguard S&P 500 ETF (VOO), which has ~0.52% of its total portfolio in MDT.
In the next part of this series, we’ll look at Medtronic’s recent collaboration with Fitbit.