Earnings Preview: Medtronic - Analyst Blog

By
A A A

We expect leading medical devices company - Medtronic ( MDT ) to beat expectations when it reports third-quarter 2013 results on Feb 19.

Why a Likely Positive Surprise?

Our proven model shows that Medtronic is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings ESP (Read: Zacks Earnings ESP: A Better Method ), which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at +2.20%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks #2 Rank (Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement. 

The combination of Medtronic's Zacks Rank # 2 (Buy) and ESP  of +2.20% makes us very confident in looking for a positive earnings beat on Feb 19.

What is Driving the Better Than Expected Earnings?

Medtronic is enjoying market share gain on the back of the Resolute Integrity DES for the treatment of coronary artery disease. Other recently launched products are also contributing to overall growth. The company also reiterated its aim of returning 50% of free cash flow to shareholders and is targeting suitable acquisitions to augment growth. Meanwhile, Medtronic has increased its focus on the emerging markets and is targeting higher revenues from this region.

Other Stocks to Consider

Here are some other companies that warrant a look as these have the right ingredients to report possible earnings beat this quarter:

DENTSPLY International Inc. ( XRAY ), Earnings ESP of +1.82% and Zacks Rank #3 (Hold)

DexCom, Inc. ( DXCM ), Earnings ESP of +11.77% and Zacks Rank #3 (Hold)

Walgreen Co. ( WAG ), Earnings ESP of +2.11% and Zacks Rank #3 (Hold).

 About Earnings ESP

Would you like to own more stocks likely to beat their next earnings report? And avoid stocks likely to disappoint?

If yes, then it's time you learn about the Earnings ESP score available on Zacks.com.



DEXCOM INC (DXCM): Free Stock Analysis Report

MEDTRONIC (MDT): Free Stock Analysis Report

WALGREEN CO (WAG): Free Stock Analysis Report

DENTSPLY INTL (XRAY): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: DXCM , MDT , WAG , XRAY

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

64,159,633
  • $100.86 ▼ 0.76%
63,552,623
  • $16.71 ▼ 0.18%
60,140,251
  • $42.71 ▲ 0.38%
52,385,870
  • $17.51 ▲ 5.86%
50,329,585
  • $13.75 ▲ 29.84%
43,337,551
  • $16.16 ▼ 1.40%
40,126,911
  • $3.605 ▲ 0.56%
39,836,742
  • $3.81 ▼ 2.56%
As of 9/16/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com