Mike Kratky, an analyst from Leerink Partners, maintained the Buy rating on Medtronic. The associated price target remains the same with $111.00.
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Mike Kratky has given his Buy rating due to a combination of factors, primarily revolving around Medtronic’s potential for growth through mergers and acquisitions (M&A). The involvement of Elliott Investment Management is anticipated to catalyze an increase in M&A activity, which has been a relatively minor part of Medtronic’s strategy compared to its peers. This shift is expected to facilitate expansion into high-growth markets and enhance sales growth.
Furthermore, the formation of a ‘Growth Committee’ aims to focus on growth-accretive tuck-in M&A, particularly in the Cardio sector. Kratky notes that addressing gaps in Medtronic’s Cardio portfolio could yield strategic benefits, considering market size and competitive dynamics. A sensitivity analysis suggests that significant M&A activity could substantially impact Medtronic’s revenue growth in the next one to two years, reinforcing the Buy recommendation.