Medtronic (MDT) Laps the Stock Market: Here's Why

The most recent trading session ended with Medtronic (MDT) standing at $80.57, reflecting a +1.37% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.87% gain on the day. Elsewhere, the Dow gained 0.67%, while the tech-heavy Nasdaq added 1.11%.

Coming into today, shares of the medical device company had lost 4.33% in the past month. In that same time, the Medical sector lost 6.67%, while the S&P 500 lost 3.97%.

Analysts and investors alike will be keeping a close eye on the performance of Medtronic in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.45, showcasing a 7.64% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $8.44 billion, down 1.25% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $5.20 per share and a revenue of $32.21 billion, demonstrating changes of -1.7% and +3.16%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Medtronic. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Medtronic currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Medtronic is holding a Forward P/E ratio of 15.29. For comparison, its industry has an average Forward P/E of 20.69, which means Medtronic is trading at a discount to the group.

We can additionally observe that MDT currently boasts a PEG ratio of 2.72. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Medical - Products was holding an average PEG ratio of 2.24 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. With its current Zacks Industry Rank of 98, this industry ranks in the top 39% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on 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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