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Medtronic Stock Decline 5.8% on Disappointing Q4 Results

Story Highlights

Medtronic’s dividend hike fails to shield its stock price due to the weak fourth-quarter results.

Medical device company Medtronic plc (NYSE: MDT) has reported weaker-than-expected results for the fourth quarter ended April 29, 2022.

Following its muted results, shares of the company declined 5.8% to close at $99.44 on Thursday.

Revenue & Earnings

Medtronic reported quarterly revenues of $8.09 billion, down 1.2% from the same quarter last year. Further, the figure failed to surpass the consensus estimate of $8.43 billion. The decline in revenues can be attributed to the 4.6% year-over-year fall witnessed in revenues from the Medical Surgical segment.

Earnings per share for the quarter came in at $1.52 per share, up 2% from the year-ago quarter. The consensus estimate for the same stood at $1.56 per share.

Dividend Hike

Meanwhile, Medtronic has announced a quarterly dividend of $0.68 per share, an increase of about 8% from the previous dividend of $0.63 per share.

The dividend will be paid on July 15, 2022, to shareholders of record as of June 24, 2022.

The company’s annual dividend of $2.72 per share now reflects a dividend yield of 2.6% based on Thursday’s closing price.

Management’s Take

The CEO of Medtronic, Geoff Martha, said, “Global supply chain and COVID-19 controls in China created acute impacts to our results in the fourth quarter. We understand the root causes, we’re addressing them, and we expect them to resolve over the near-term. We remain keenly focused on delivering innovation-driven growth with a robust pipeline of technologies in fast-growing markets, and we’re committed to creating strong shareholder value through strategic capital allocation and active portfolio management.”

Stock Rating

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on seven Buys and five Holds. MDT’s average price target of $122.09 implies that the stock has upside potential of 22.8% from current levels. Shares have declined 20.5% over the past year.

Bloggers’ Stance

TipRanks data shows that financial bloggers are 86% Bullish on MDT, compared to the sector average of 70%.

Conclusion

Although Medtronic has posted muted results for the fourth quarter, the company’s move to hike its dividend is likely to increase its investment appeal.

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