Zacks Investment Research Downgrades Medtronic (NYSE:MDT) to Strong Sell

Zacks Investment Research lowered shares of Medtronic (NYSE:MDT) from a hold rating to a strong sell rating in a research note released on Wednesday morning, Zacks.com reports. The brokerage currently has $84.00 price target on the medical technology company’s stock.

According to Zacks, “Medtronic’s lower-than-expected earnings and weak performances demonstrated by the company at CER, backed by dismal performance in all major business segments and geographies are concerning. The company’s performance was primarily impacted from deferred procedures due to the pandemic. Escalating costs and expenses persistently put pressure on its margins. Unfavorable currency movement once again deterred growth in the quarter. Over the past six months, Medtronic underperformed its industry. Yet, it saw significant growth in airways and ventilators sales in the fourth quarter of fiscal 2020 amid the pandemic. It is currently focusing on the geographical diversification of its businesses, apart from product innovation. Also, Medtronic demonstrated a strong solvency position. Its fourth quarter performance saw better-than-expected revenues.”

MDT has been the topic of a number of other research reports. Jefferies Financial Group boosted their price objective on Medtronic from $110.00 to $120.00 and gave the stock a buy rating in a research note on Friday, May 22nd. Cfra raised shares of Medtronic from a buy rating to a strong-buy rating and cut their price target for the company from $127.00 to $121.00 in a report on Thursday, May 21st. Morgan Stanley lowered their price objective on shares of Medtronic from $112.00 to $106.00 and set an equal weight rating on the stock in a research note on Friday, May 22nd. Wells Fargo & Co dropped their target price on shares of Medtronic from $130.00 to $108.00 and set an overweight rating on the stock in a report on Wednesday, April 22nd. Finally, UBS Group reduced their target price on shares of Medtronic from $130.00 to $118.00 and set a buy rating for the company in a report on Friday, May 22nd. Three analysts have rated the stock with a sell rating, six have issued a hold rating, twenty-two have issued a buy rating and one has assigned a strong buy rating to the company’s stock. The stock has a consensus rating of Buy and an average target price of $113.55.

Shares of MDT opened at $96.48 on Wednesday. The firm has a 50-day moving average price of $93.73 and a 200 day moving average price of $99.84. The firm has a market capitalization of $129.41 billion, a PE ratio of 27.18, a P/E/G ratio of 3.65 and a beta of 0.67. The company has a quick ratio of 1.72, a current ratio of 2.13 and a debt-to-equity ratio of 0.43. Medtronic has a 52-week low of $72.13 and a 52-week high of $122.15.

Medtronic (NYSE:MDT) last issued its quarterly earnings results on Thursday, May 21st. The medical technology company reported $0.58 earnings per share for the quarter, missing analysts’ consensus estimates of $1.28 by ($0.70). Medtronic had a return on equity of 12.17% and a net margin of 16.56%. The company had revenue of $6 billion during the quarter, compared to analyst estimates of $6.10 billion. During the same period in the prior year, the company posted $1.54 earnings per share. The company’s revenue was down 26.4% on a year-over-year basis. On average, equities analysts expect that Medtronic will post 3.41 EPS for the current year.

The company also recently disclosed a quarterly dividend, which was paid on Friday, July 17th. Investors of record on Friday, June 26th were issued a $0.58 dividend. The ex-dividend date was Thursday, June 25th. This represents a $2.32 dividend on an annualized basis and a yield of 2.40%. This is an increase from Medtronic’s previous quarterly dividend of $0.54. Medtronic’s dividend payout ratio is currently 50.54%.

In other news, SVP Carol A. Surface sold 2,000 shares of the stock in a transaction on Friday, May 29th. The shares were sold at an average price of $97.72, for a total transaction of $195,440.00. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. 0.28% of the stock is owned by insiders.

Several hedge funds and other institutional investors have recently modified their holdings of MDT. Evolution Wealth Advisors LLC boosted its holdings in Medtronic by 403.7% in the 2nd quarter. Evolution Wealth Advisors LLC now owns 272 shares of the medical technology company’s stock valued at $25,000 after purchasing an additional 218 shares during the period. Price Wealth LLC boosted its stake in Medtronic by 73.2% in the second quarter. Price Wealth LLC now owns 291 shares of the medical technology company’s stock worth $27,000 after purchasing an additional 123 shares in the last quarter. Balentine LLC bought a new stake in shares of Medtronic during the first quarter worth $33,000. Reilly Financial Advisors LLC increased its stake in shares of Medtronic by 79.4% in the first quarter. Reilly Financial Advisors LLC now owns 375 shares of the medical technology company’s stock valued at $34,000 after buying an additional 166 shares in the last quarter. Finally, Lion Street Advisors LLC acquired a new stake in shares of Medtronic in the first quarter valued at $36,000. 81.01% of the stock is currently owned by institutional investors and hedge funds.

About Medtronic

Medtronic plc develops, manufactures, distributes, and sells device-based medical therapies to hospitals, physicians, clinicians, and patients worldwide. It operates through four segments: Cardiac and Vascular Group, Minimally Invasive Therapies Group, Restorative Therapies Group, and Diabetes Group.

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