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Preview: What to Expect From Medtronic’s Earnings on Tuesday

By:
Vivek Kumar

“Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company's 5% WAMGR and supported by pipeline product launches and tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

Preview: What to Expect From Medtronic’s Earnings on Tuesday

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Medtronic, an American-Irish medical device company, is expected to report its fiscal second-quarter earnings of $1.29 per share, which represents year-over-year growth of over 26% from $1.02 per share seen in the same period a year ago.

The company has beaten earnings per share (EPS) estimates all times in the last four quarters with a surprise of over 13%. The Fridley, Minnesota-based medical company would post revenue growth of nearly 4% to $7.9 billion.

According to ZACKS Research, as of fiscal 2021, the company expects organic revenue growth of approximately 9%. Revenues are expected to increase by $100 to $200 million in fiscal 2022.

Global revenues for fiscal 2022 are expected to be $33.29 billion, according to the Zacks Consensus Estimate. Adjusted earnings per share guidance have been raised from $5.60 to $5.75 to $5.65 to $5.75. According to Zacks, adjusted earnings are expected to be $5.68.

Medtronic Stock Price Forecast

Sixteen analysts who offered stock ratings for Medtronic in the last three months forecast the average price in 12 months of $149.73 with a high forecast of $165.00 and a low forecast of $142.00.

The average price target represents a 28.19% change from the last price of $116.81. From those 16 analysts, 15 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Technical analysis suggests it is good to sell as 100-day Moving Average, and 50-200-day MACD Oscillator signals a strong selling opportunity.

Morgan Stanley gave the base target price of $154 with a high of $177 under a bull scenario and $111 under the worst-case scenario. The firm gave an “Overweight” rating on the medical device company’s stock.

Several other analysts have also updated their stock outlook. BTIG raised the target price to $142 from $140. UBS lifted the target price to $149 from $145. Oppenheimer upped the price target to $150 from $147. Bernstein increased the target price to $148 from $141.

Analyst Comments

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s 5% WAMGR and supported by pipeline product launches and tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results, and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

Check out FX Empire’s earnings calendar

About the Author

Vivek has over five years of experience in working for the financial market as a strategist and economist.

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