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Medtronic (MDT) Gains But Lags Market: What You Should Know

In the latest trading session, Medtronic (MDT) closed at $96.43, marking a +0.08% move from the previous day. This change lagged the S&P 500's 0.74% gain on the day. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 1.67%.

Heading into today, shares of the medical device company had gained 8.43% over the past month, outpacing the Medical sector's gain of 3.64% and the S&P 500's gain of 5.51% in that time.

Investors will be hoping for strength from MDT as it approaches its next earnings release. On that day, MDT is projected to report earnings of $0.26 per share, which would represent a year-over-year decline of 79.37%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.38 billion, down 28.27% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.41 per share and revenue of $27.45 billion, which would represent changes of -25.71% and -5.08%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MDT. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.69% lower. MDT is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, MDT is holding a Forward P/E ratio of 28.25. This represents a discount compared to its industry's average Forward P/E of 40.43.

Investors should also note that MDT has a PEG ratio of 3.65 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Products industry currently had an average PEG ratio of 5.3 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 162, putting it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MDT in the coming trading sessions, be sure to utilize Zacks.com.


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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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