Medtronic Upgraded to “Outperform” at Wells Fargo (MDT)


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Medical device maker Medtronic, Inc. ( MDT ) on Monday caught a big upgrade from analysts at Wells Fargo.

The firm said it boosted its rating on MDT from "Market Perform" to "Outperform" and raised its valuation range from $40-42 to $47-48. That new range implies a potential 21% upside to the stock's Friday closing price of $39.67.

A Wells Fargo analyst commented, "We Believe the relatively large valuation gap with its peers will narrow over the next 6-12 months because (1) MDT's six recently launched products will accelerate its organic growth rate to 4.5% in FY2012 from 1.1% in FY2011; (2) the announcement of the new CEO over the next month or so will provide clarity for investors which will lead to incremental buyers of MDT shares; and (3) we are convinced that MDT's Ardian for resistant hypertension represents a multibillion dollar opportunity that is not priced in yet. We are raising our FY2012 sales estimate by $31MM to $16.784B and we are raising our FY2012 EPS stimate by $0.01 to $3.63."

Medtronic shares were mostly flat in premarket trading Monday.

The Bottom Line
Shares of Medtronic ( MDT ) have a 2.27% dividend yield, based on Friday's closing stock price of $39.67. The stock has technical support in the $34-$36 price area. If the shares can firm up, we see overhead resistance around the $41-$42 price levels.

Medtronic, Inc. ( MDT ) is not recommended at this time, holding a DARS™ Rating of 3.4 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 Nasdaq, Inc.

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