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Goldman Sachs Upgrades Medtronic To Buy; Raises PT To $45


Goldman Sachs upgrades shares of Medtronic (NYSE: MDT) to Buy from Neutral and raises its 12-month price target to $45 on higher EPS forecasts and an increase in peer group multiples. It sees the potential for new management to take more aggressive corporate action that could drive meaningful upside, following the departure of the Chairman and CEO Bill Hawkins.

Over the immediate term, Goldman Sachs sees several fundamental catalysts to drive the stock higher – the launch of new products in cardiac rhythm disease management and spine and a recovery in end-user markets. At current levels Goldman Sachs believes the stock is pricing in a scenario in which the previous challenges that weighed on the stock do not improve. However, in the near-term, Goldman Sachs believes MDT's share performance will benefit from a strong new product pipeline and a potential recovery in end-user markets.

Given the stock's consistent underperformance over the last five years and the board's stated intent to look outside the company for new leadership, Goldman Sachs thinks a new direction could well be the result of this transition and could unlock a significant amount of value for the company.

MDT closed Thursday at $37.99

Posted-In: Goldman SachsAnalyst Color Analyst Ratings


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