Medical device maker Medtronic (NYSE:MDT) is scheduled to announce its fiscal Q2 financial results on November 22. Similar to Q1, Medtronic’s EPS (earnings per share) could continue to mark a year-over-year decline in Q2.
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TipRanks’ data shows that MDT will post earnings of $1.28 per share, compared to the $1.32 reported in the prior year.
Macro factors, including inflation, adverse currency movement, and supply-chain headwinds, could impact its sales and earnings in Q2. Further, difficult year-over-year comparisons could remain a drag. Also, professional labor shortages and competitive headwinds in the pelvic health and diabetes segments could impact its revenues.
Nevertheless, the company’s management remains upbeat and expects its margins to improve as revenue growth accelerates sequentially. Improved product availability and new launches will support its organic sales, which the company forecasts to increase by 3-3.5%.
The company’s balance sheet remains strong, and Medtronic continues to return solid cash to its shareholders through dividend payments.
Is MDT Stock a Buy?
On TipRanks, MDT stock has a Moderate Buy consensus rating based on five Buys and 13 Holds. Meanwhile, analysts’ average price target of $96.80 implies 19.1% upside potential.
It’s worth highlighting that the company’s key renal denervation (RDN) system, a procedure to treat hypertension, missed the primary efficacy endpoint in the trial.
In response, Needham analyst Michael Matson said, “Given the trial results, macro and idiosyncratic headwinds affecting MDT’s revenue growth and margins, we maintain our Hold rating.
Importantly, insiders and hedge fund managers have sold MDT stock. Our data shows that hedge funds sold 3.1M MDT stock last quarter. Meanwhile, insiders sold Medtronic stock worth $196K. Overall, MDT stock has a Neutral Smart Score of four on 10.
Bottom Line
Macro and currency headwinds could continue to impact MDT’s financials. However, product availability will lead to a sequential improvement in organic revenue.
