A look into Medtronic plc (MDT)’s deeper side

Medtronic plc (NYSE: MDT) stock jumped 0.14% on Friday to $93.21 against a previous-day closing price of $93.08. With 4.02 million shares changed hands, the volume of the stock remained lighter than its average volume of 5.71 million shares. During the session, the Medical Devices company that operates in wider Healthcare sector, reached to the highest price of $94.14 whereas the lowest price it dropped to was $92.67. The 52-week range on MDT shows that it touched its highest point at $135.89 and its lowest point at $86.70 during that stretch. It currently has a 1-year price target of $111.32. With its current market cap of 124.79 billion, MDT has annualized dividend of $2.72 while the current yield stands at 2.92%. Beta for the stock currently stands at 0.77.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MDT was up-trending over the past week, with a rise of 1.43%, but this was up by 2.00% over a month. Three-month performance dropped to -9.63% while six-month performance fell -9.93%. The stock lost -28.99% in the past year, while it has lost -9.90% so far this year. A look at the trailing 12-month EPS for MDT yields 3.74 with Next year EPS estimates of 6.01. For the next quarter, that number is 1.12. This implies an EPS growth rate of 44.20% for this year and 8.08% for next year. EPS is expected to grow by 12.66% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 5.20%.

Float and Shares Shorts:

At present, 1.34 billion MDT shares are outstanding with a float of 1.33 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 10.22 million, which was 0.77% higher than short shares on Jun 14, 2022. In addition to Mr. Geoffrey Straub Martha as the firm’s Chairman & CEO, Ms. Karen L. Parkhill serves as its EVP, CFO, IT & Enterprise Excellence.

Institutional Ownership:

Through their ownership of 83.89% of MDT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.22% of MDT, in contrast to 37.02% held by mutual funds. Shares owned by individuals account for 0.17%. As the largest shareholder in MDT with 8.68% of the stake, The Vanguard Group, Inc. holds 115,268,708 shares worth 115,268,708. A second-largest stockholder of MDT, BlackRock Fund Advisors, holds 66,749,674 shares, controlling over 5.02% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in MDT, holding 58,504,184 shares or 4.40% stake. With a 2.98% stake in MDT, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 39,552,065 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.24% of MDT stock, is the second-largest Mutual Fund holder. It holds 29,693,352 shares valued at 2.66 billion. SPDR S&P 500 ETF Trust holds 1.09% of the stake in MDT, owning 14,469,459 shares worth 1.3 billion.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Apr 28, 2022, MDT reported revenue of $8.09B and operating income of $1.70B. Over the past year, revenue came in at $31.69B while operating income stood at $5.75B. It generated $1.49B net income for the quarter, which came to $5.04B over the last twelve months. The EBITDA in the recently reported quarter was $2.46B and diluted EPS was $1.10. EBITDA for the full year was $8.93B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MDT since 26 analysts follow the stock currently. There are 10 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 4 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With MDT analysts setting a high price target of $122.00 and a low target of $85.00, the average target price over the next 12 months is $106.53. Based on these targets, MDT could surge 30.89% to reach the target high and fall by -8.81% to reach the target low. Reaching the average price target will result in a growth of 14.29% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. MDT will report FY 2023 earnings on 05/25/2023. Analysts have provided yearly estimates in a range of $5.65 being high and $5.37 being low. For MDT, this leads to a yearly average estimate of $5.56. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Medtronic plc surprised analysts by -$0.04 when it reported $1.52 EPS against a consensus estimate of $1.56. The surprise factor in the prior quarter was $0.00. Based on analyst estimates, the high estimate for the next quarter is $1.16 and the low estimate is $1.10. The average estimate for the next quarter is thus $1.12.

Summary of Insider Activity:

Insiders traded MDT stock several times over the past three months with 0 Buys and 9 Sells. In these transactions, 0 shares were bought while 2,257 shares were sold. The number of buy transactions has increased to 23 while that of sell transactions has risen to 30 over the past year. The total number of shares bought during that period was 291,126 while 258,531 shares were sold.

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