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What Analysts Recommend for Medtronic after Its Q4 Results

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On May 23, Medtronic (MDT) reported its fiscal 2019 fourth-quarter earnings results. The company reported revenue of $8.15 billion in the quarter, a YoY (year-over-year) rise of 0.02% on a reported basis, a YoY rise of 3.6% on an organic basis, and $25.25 million higher than analysts’ consensus revenue estimate.

The company reported revenue of $30.56 billion in fiscal 2019, a YoY rise of 2.0% on a reported basis. According to its fourth-quarter earnings press release, its revenue was negatively affected by its divestiture of certain businesses to Cardinal Health and unfavorable foreign exchange movements in fiscal 2019.

In the fourth quarter, Medtronic reported non-GAAP (generally accepted accounting principles) EPS of $1.54, a YoY rise of 8.45% and $0.07 higher than the consensus estimate. The company reported non-GAAP EPS of $5.22 in fiscal 2019, a YoY rise of 9.43% and ahead of its guidance of $5.14–$5.16.

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Following the release of its results, Medtronic closed at $91.64, 3.24% higher than its previous day’s close. On May 24, the company closed at $93.03, 1.52% higher than its previous close, 13.92% higher than its 52-week low of $81.66, and 7.11% lower than its 52-week high of $100.15. The company’s market cap was $124.92 billion, and its PE, forward PE, PE-to-growth, price-to-sales, price-to-book, and price-to-cash ratios were 24.81x, 15.71x, 3.47x, 4.09x, 2.51x, and 13.66x, respectively.

Medtronic’s 14-day relative strength index is currently 71.09. Its number of outstanding shares is 1.34 billion, while its short float ratio is 0.72%.

Analysts’ recommendations and target prices

Wall Street analysts expect an upside potential of 10.80% for Medtronic based on the company’s closing price on May 24. Analysts first raised the company’s 12-month consensus target price from $103.23 in February to $103.38 in March but then reduced it to $103.28 in April and $102.33 in May.

Of the 27 analysts covering Medtronic, six have given it “strong buys,” 11 have given it “buys,” and ten have given it “holds.” The highest and lowest target price estimates for Medtronic are $121 and $84, respectively.

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