On August 22, 2017, Medtronic (MDT) announced its 1Q18 earnings results. Medtronic exceeded analysts’ EPS (earnings per share) estimate but missed the revenue estimate. Medtronic’s stock price fell ~0.6% in the pre-market trading session following the announcement.
Since its fiscal 4Q17 results announcement on May 25, 2017, Medtronic’s stock has fallen ~6.5%. In comparison, peers Abbott Laboratories (ABT), Boston Scientific (BSX), and Zimmer Biomet (ZBH) have seen stock price returns of 14%, -0.70%, and -4.6%, respectively.
The graph above compares Medtronic’s and peers’ price movement. Medtronic expects to generate better growth across its top and bottom lines. It is expected to recover from near-term headwinds, and its innovative product pipeline and acquisition synergies will help drive the company’s growth over the medium-to-long term. Also, Medtronic has been generating margin growth over recent quarters, driven by its cost transformation initiatives, accelerated sales, and marketing programs.
Medtronic has registered a stock price decline of around 9% over the last 12 months. The S&P 500, which represents the overall market’s performance, has returned ~11.7%, and the Health Care Select Sector SPDR ETF (XLV), which represents the broader US healthcare sector, has returned ~6.2%. Medtronic’s stock has followed a bearish trend over the last few quarters. Next, let’s discuss analysts’ post-1Q18 recommendations for Medtronic.