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Will Medtronic Meet Analysts’ Earnings Estimates in Fiscal 1Q18?

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Nov. 20 2020, Updated 3:14 p.m. ET

Analyst estimates

Medtronic (MDT) accounts for ~1.1% of the total holdings of the Vanguard Growth ETF (VUG). For the last several quarters, Medtronic has consistently exceeded analysts’ earnings estimates.

In fiscal 4Q17, Medtronic yet again reported EPS (earnings per share) higher than Wall Street estimates. Deviation of actual results from analyst estimates often affects a company’s stock. A stock usually shows upward price movement if the company’s results surpass analyst expectations, whereas the stock price declines if the results fail to meet analysts’ expectations.

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In fiscal 4Q17, Medtronic surpassed analysts’ consensus revenue estimate of ~$7.2 billion as well as their consensus EPS (earnings per share) estimate of $1.31. The company’s stock price witnessed a rise after Medtronic announced its fiscal 4Q17 earnings results on May 25, 2017. For more, read Medtronic’s Stock Rose on Strong Fiscal 4Q17 Results.

Wall Street analysts estimate that Medtronic will post EPS of $1.08 in fiscal 1Q18. Medtronic has provided 1Q18 constant currency EPS guidance in the high-single-digit range. Currency headwinds are expected to have an impact of around $0.03 to $0.05 on the company’s 1Q18 EPS.

In their most recent quarters, Medtronic peers Becton Dickinson (BDX), Stryker (SYK), and Boston Scientific (BSX) registered EPS of $0.29, $2.30, and $1.48, respectively.

Profit margin estimates

For fiscal 1Q18, Medtronic is estimated to register an adjusted net profit margin of around 20% on a YoY (year-over-year) basis in comparison to ~23% in fiscal 4Q17. The company registered strong profits in 4Q17. However, in 1Q18, the company expects flat gross margin or moderate growth due to higher sales and marketing expenditures for some key product launches, which will generate results in the second half of fiscal 2018. For company guidance, read What Medtronic Projects for Fiscal 2018.

Next, we’ll take a look at the recent analyst stock recommendations for Medtronic.

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