Medtronic Upgraded to “Outperform” at Credit Suisse; Growth Prospects Improving (MDT)

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Medical device maker Medtronic, Inc. ( MDT ) on Thursday caught a big upgrade from analysts at Credit Suisse.

The firm boosted its rating on MDT from "Neutral" to "Outperform" and lifted its price target from $43 to $44. That new target suggests a nearly 20% upside to the stock's Wednesday closing price of $36.82.

A Credit Suisse analyst commented, "We now see an improving top-line for MDT as achievable expect execution in emerging markets combined with recovery in key developed markets (consistent with F4Q's US ICD results) & tuck-in acquisitions to drive valuation expansion over the next 12 months. Given improving growth prospects, MDT's attractive FCF profile ($4.4B expected in FY13, ~12% implied FCF yield) and valuation (currently trades at 9x our FY14 EPS estimate vs. 5 year NTM average of 12x & trough of 8x), we now feel comfortable upgrading to Outperform from Neutral."


Medtronic shares were unchanged in premarket trading Thursday.

The Bottom Line
Shares of Medtronic ( MDT ) have a 2.63% dividend yield, based on last night's closing stock price of $36.82. The stock has technical support in the $33-$34 price area. If the shares can firm up, we see overhead resistance around the $40-$41 price levels.

Medtronic, Inc. ( MDT ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



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.

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