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Medtronic (MDT)
:MDT
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Medtronic
(NYSE:MDT)77Outperform
Positive Factors
Earnings Performance
Medtronic delivered a higher adjusted EPS than expected, showing strong margin and leverage capabilities.
Product Development
Medtronic's stock is expected to benefit from the full-market release of RDN, Hugo robotics FDA clearance, and ongoing uptake of Afferra and Sphere 9.
Negative Factors
Sales Performance
MedSurg fell short of expectations on a combination of pressures in stapling, a transient shift in US distributor purchasing patterns and a decline in flu hospitalizations that hit Nellcor.
Medtronic (MDT) vs. S&P 500 (SPY)
Market Cap
$119.32B
Dividend Yield2.96%
Average Volume (3M)7.10M
Price to Earnings (P/E)28.3
Beta (1Y)0.67
Revenue Growth2.72%
EPS Growth4.48%
CountryUS
Employees95,000
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)3.29
Shares Outstanding1,282,543,500
10 Day Avg. Volume7,442,685
30 Day Avg. Volume7,101,557
Financial Highlights & Ratios
PEG Ratio6.32
Price to Book (P/B)N/A
Price to Sales (P/S)3.64
Price to Cash Flow (P/CF)11.80
P/FCF Ratio13.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$96.40Price Target Upside3.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Medtronic Business Overview & Revenue Model
Company DescriptionFounded in 1949, Medtronic Plc, a medical technology company, develops, manufactures, distributes, and sells device-based medical therapies and services worldwide. It operates through four segments, including Cardiac and Vascular Group; Minimally Invasive Technologies Group; Restorative Therapies Group; and Diabetes Group. The company is headquartered in Dublin, Ireland.
How the Company Makes MoneyMedtronic primarily generates revenue through the sale of medical devices and therapies across its four major business segments. The Cardiac and Vascular Group, which includes products for cardiac rhythm disorders, coronary artery disease, heart valves, and peripheral vascular disease, is a significant contributor to the company's revenue. The Minimally Invasive Therapies Group offers surgical solutions, advanced energy products, and patient monitoring systems. The Restorative Therapies Group provides products for spinal surgery, neuromodulation, and neurovascular therapies. The Diabetes Group focuses on insulin pumps and continuous glucose monitoring systems. Medtronic's revenue model is supported by strategic acquisitions, research and development investments, and collaborations with healthcare providers and institutions. Additionally, the company leverages its global distribution network and strong relationships with healthcare professionals to maintain and grow its market share.
Medtronic Financial Statement Overview
Summary
Medtronic demonstrates solid financial health with stable revenue growth, strong profitability, and efficient cash flow management. Despite moderate leverage, the company maintains a robust equity base, ensuring financial stability.Income Statement
Medtronic shows strong profitability with a stable Gross Profit Margin of 52.8% in TTM. The Net Profit Margin improved to 12.8% in TTM from 11.4% previous year, indicating efficient cost management. Revenue grew by 2.58% in TTM, showcasing steady growth. EBIT and EBITDA margins also improved, reflecting operational efficiency.85
Very Positive
Balance Sheet
The company maintains a solid financial structure with a Debt-to-Equity Ratio of 0.54, indicating moderate leverage. Return on Equity stands at 8.63%, reflecting decent profitability for shareholders. The Equity Ratio of 54.9% suggests a strong equity base, enhancing financial stability.78
Positive
Cash Flow
Operating Cash Flow to Net Income Ratio is 1.71, highlighting robust cash generation relative to net income. Free Cash Flow increased by 5.13% YoY, indicating effective cash management. The Free Cash Flow to Net Income Ratio of 1.28 underscores strong cash flow coverage.82
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 33.20B | 32.36B | 31.23B | 31.69B | 30.12B | 28.91B | Gross Profit |
| 17.51B | 21.15B | 20.51B | 21.54B | 19.63B | 19.49B | EBIT |
| 6.05B | 5.14B | 5.49B | 5.75B | 4.48B | 4.79B | EBITDA |
| 7.36B | 8.20B | 8.47B | 9.55B | 8.19B | 7.83B | Net Income Common Stockholders |
| 4.26B | 3.68B | 3.76B | 5.04B | 3.61B | 4.79B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.01B | 8.01B | 7.96B | 10.57B | 10.82B | 10.95B | Total Assets |
| 89.98B | 89.98B | 90.95B | 90.98B | 93.08B | 90.69B | Total Debt |
| 26.05B | 26.05B | 24.36B | 24.11B | 26.39B | 24.80B | Net Debt |
| 24.76B | 24.76B | 22.82B | 20.40B | 22.80B | 20.66B | Total Liabilities |
| 39.56B | 39.56B | 39.28B | 38.26B | 41.48B | 39.82B | Stockholders Equity |
| 50.21B | 50.21B | 51.48B | 52.55B | 51.43B | 50.74B |
| Cash Flow | Free Cash Flow | ||||
| 5.47B | 5.20B | 4.58B | 5.98B | 4.88B | 6.02B | Operating Cash Flow |
| 7.29B | 6.79B | 6.04B | 7.35B | 6.24B | 7.23B | Investing Cash Flow |
| -2.14B | -2.37B | -3.49B | -1.66B | -2.87B | -3.20B | Financing Cash Flow |
| -5.38B | -4.45B | -4.96B | -5.34B | -4.14B | -4.20B |
Medtronic Technical Analysis
Positive
93.03
Price Trends
87.05
Positive
86.87
Positive
84.53
Positive
Market Momentum
1.17
Negative
60.62
Neutral
86.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MDT, the sentiment is Positive. The current price of 93.03 is above the 20-day moving average (MA) of 90.71, above the 50-day MA of 87.05, and above the 200-day MA of 84.53, indicating a bullish trend. The MACD of 1.17 indicates Negative momentum. The RSI at 60.62 is Neutral, neither overbought nor oversold. The STOCH value of 86.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MDT.
Medtronic Risk Analysis
Medtronic disclosed 34 risk factors in its most recent earnings report. Medtronic reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Medtronic Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $147.36B | 49.75 | 14.51% | 0.82% | 10.23% | -5.74% | |
79 Outperform | $238.61B | 18.01 | 28.12% | 1.60% | 4.59% | 134.50% | |
78 Outperform | $152.91B | 83.05 | 8.51% | ― | 17.60% | 16.84% | |
78 Outperform | $398.27B | 28.57 | 19.68% | 2.96% | -4.51% | 3.69% | |
77 Outperform | $119.32B | 28.28 | 8.63% | 2.96% | 2.72% | 4.48% | |
71 Outperform | $20.77B | 23.53 | 7.25% | 0.92% | 3.84% | -9.29% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
MDT
Medtronic
93.03
11.22
13.71%
ABT
Abbott Laboratories
137.58
21.47
18.49%
BSX
Boston Scientific
103.61
36.59
54.60%
JNJ
Johnson & Johnson
165.42
10.42
6.72%
SYK
Stryker
389.92
40.75
11.67%
ZBH
Zimmer Biomet Holdings
103.99
-19.73
-15.95%
Medtronic Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 0.24% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call was largely positive, highlighting strong revenue growth, advancements in key segments, and successful international expansion. However, some challenges in the surgical portfolio and distributor dynamics were noted.Highlights
Consistent Revenue Growth
Medtronic achieved mid-single-digit revenue growth for the ninth consecutive quarter, with key areas like cardiac ablation solutions growing by 22%.
Strong Performance in Key Segments
Leadless pacing, neuromodulation, and diabetes grew double-digits, while structural heart and U.S. cranial and spinal technologies grew high-single-digits.
EPS Growth and Margin Improvement
The company reported high-single-digit EPS growth ahead of consensus and guidance, with improvements in both gross and operating margins.
Pipeline Advancements
Advancements in innovation with renal denervation and progress in significant markets like diabetes and cardiac ablation solutions.
Successful International Growth
International markets grew 5%, with high-single-digit growth in Japan and emerging markets showing high-single-digit to double-digit growth.
Lowlights
Impact of Distributor Dynamics
A change in U.S. distributor buying patterns adversely affected surgical performance, costing approximately 200 basis points in growth.
Challenges in Medical Surgical Portfolio
Despite international growth, the U.S. surgical portfolio underperformed due to competitive pressures in the stapling franchise.
Peripheral Vascular Decline
Peripheral vascular performance declined due to volatility in China related to value-based procurement (VBP).
Company Guidance
In the fiscal year 2025 third quarter earnings call, Medtronic reported a consistent mid-single-digit revenue growth, marking the ninth consecutive quarter of such performance. The company highlighted a robust 22% growth in its Cardiac Ablation Solutions and double-digit growth in leadless pacing, neuromodulation, and diabetes segments. Structural heart and U.S. cranial and spinal technologies grew high-single-digits. Medtronic's EPS increased by high-single-digits, surpassing both consensus and the higher end of their guidance range. Additionally, the company anticipates further revenue and EPS acceleration in the fourth quarter, driven by its innovative pipeline and expansion into high-potential markets. The strategic focus on disciplined pricing, operating leverage, and strong free cash flow is expected to deliver significant shareholder value.Medtronic Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Medtronic Appoints Thierry Pieton as New CFO
Positive
Jan 21, 2025
Medtronic announced the appointment of Thierry Pieton as Chief Financial Officer effective March 3, 2025. Pieton, who will report to CEO Geoff Martha, joins from Renault Group where he was CFO since March 2022. His extensive experience includes roles at Nissan, GE, and PwC, where he demonstrated strong financial leadership and innovation-driven growth, which aligns with Medtronic’s strategic financial goals. The appointment is expected to enhance Medtronic’s financial operations and strategic initiatives, contributing to its mission of transforming healthcare technology.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.