Medtronic New York Stock Exchange: MDT The share price is down significantly from its 2021 peak, providing investors with a valuable opportunity. The share price is falling due to the post-Covid-19 correction and headwinds leading to sluggish growth, factors that won’t last forever. What will remain is Medtronic’s performance and ability to maintain distribution growth.
Medtronic today
(As of 11/21/2024 ET)
- 52 week range
- $75.96
▼
$92.68
- Dividend yield
- 3.31%
- P/E ratio
- 25.90
- Target price
- $95.19
No matter how tepid it may be, growth is growth, and that’s critical for a dividend aristocrat like this one. Given the projected growth, the return on equity outlook is as bright as ever, as is the technical forecast for share prices. The share price bottomed in 2023 and is now experiencing a reversal that is likely to return the share price to record levels.
Value and profitability are central to Medtronic’s investment thesis this year. Trading near its lows, the medtech company is valued at just 16 times earnings, which is at the low end of its historical range and less than half its peak. The low valuation puts the yield at the high end of the range, above 3.2%, with the share price approaching $85, with the distribution expected to rise and the share price to follow. Even without distribution growth, buybacks should also be taken into account, which reduced their number by more than 3% in F2025.
Medtronic Ahead of Forecasts and Raises Recommendations
Medtronic may not have inspired the bulls with its Q2 2025 report, but it made the results just as strong. The company increased revenue by 5% despite the impact of unfavorable currency exchange rates, which lowered the overall figure by 30 basis points. Revenue is also strong compared to consensus, which had expected 150 basis points less. Multiple franchises across all segments are considered strength drivers, reflecting the strength of Medtronic’s diversified portfolio. The medical-surgical segment was the weakest segment, growing by just 1.2%, while the diabetes segment grew by over 12%, and the cardiology and neuroscience segments grew by 6% and 7%.
Medtronic MarketRank™ Stock Analysis
- Overall MarketRank™
- 99th percentile
- Analyst rating
- Hold
- Pros/Cons
- Growth potential 12.2%
- Short interest level
- Healthy
- Dividend Power
- Strong
- Environmental assessment
- -1.28
- Mood News
- 0.80
- Insider trading
- N/A
- Project Profit Growth
- 7.33%
See full analysis
Margin news is mixed but good for prospects and investors. Adjusted net income decreased year over year due to the impact of foreign currency translation. Excluding that, adjusted earnings were up 8%, but the critical detail is cash flow. The company’s GAAP net income and cash flow increased 40% due to improved efficiencies that are expected to continue.
The company’s management favors an increase in Medtronic stock prices. It raised its revenue and earnings guidance for the full year of fiscal 2025, placing a new revenue floor above the previous high and a revenue floor in line with consensus estimates. This should cause analysts to stick to their stock price targets, if not raise them as seen in 2024.
However, analyst sentiment is trending bullish for 2024, which will see the market turn around with increased coverage and a higher consensus price target. MDT shares have gained five or 40% more analyst buys over the past 12 months, and their price target has increased by 5%, indicating 15% upside potential from critical target support levels. A move to the $95 consensus target would put the market at a multi-year high and confirm a major reversal pattern.
Medtronic is in the head and shoulders phase
Medtronic’s stock price is in a classic head-and-shoulders reversal. In the fall of 2023, a head with lows formed, and now the second shoulder has formed. All that remains is for the market to rise and set a new high, opening the door for a larger move. The critical resistance point in 2024 is near $90.50, the pattern’s neckline. A move above this level would be bullish and could result in a rapid rise of $18 equal to the magnitude of the reversal pattern. The larger move faces resistance at points such as $110 and $120, but could rise above them over time.
Before you consider Medtronic, here’s what you need to hear.
MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Medtronic wasn’t on the list.
While Medtronic currently has a Hold rating among analysts, the top-rated analysts think these five stocks are Strong Buys.
View five stocks here
As the AI market heats up, investors with AI dreams have the potential to see real profits. Learn about the industry as a whole, as well as seven companies powered by AI.
Get this free report