Medtronic’s Valuations and Growth Story: What Can Investors Expect?
Stock performance
Medtronic (MDT) is the biggest pure-play medical device company. It has a leading position in the cardiovascular market segment. The company is headquartered in Dublin, Ireland. However, its operational headquarters are in Minnesota. The company was trading at $75.48 as of March 29, 2016. It has a 50-day moving average of $75.39 and a 200-day moving average of $74.62. To learn more about the company, read An Investor’s Guide to Medtronic: Key Company Overview.
As of March 29, 2016, Medtronic’s stock was trading ~36% above its 52-week low and ~4.6% below its 52-week high. The company’s share price fell ~4.1% after the release of its 3Q16 earnings on March 1, 2016. The fall was triggered by lower-than-expected operating margins reported for the quarter due to continued pressure from the strong US dollar. Since then, the stock price rose by ~1.8%. Thermo Fisher has returned ~10.3% over the last six months. It outperformed the Market represented by the S&P 500 Index. It returned ~7.5% during the same period.
Peers’ stock performance
As of March 29, 2016, Medtronic’s major competitors including Johnson & Johnson (JNJ), Zimmer Biomet Holdings (ZBH), and Stryker (SYK) generated returns of 16.7%, 13.6%, -13.8% over the last six months. The Health Care Select Sector SPDR Fund (XLV) focuses on the medical device industry. Medtronic accounts for ~2.2% of XLV’s total holdings.
Series overview
In this series, we’ll discuss what investors can expect from Medtronic in the short-term and long-term horizon. We’ll cover analysts’ estimates and recommendations, the company’s growth drivers and strategies, product pipeline, portfolio management, and capital deployment initiatives. We’ll also look at the company’s emerging market growth strategy as well as an update on the Covidien acquisition.
Browse this series on Market Realist: