Market Overview

BofA: Medtronic's Growth 'Should Continue To Surprise'

BofA: Medtronic's Growth 'Should Continue To Surprise'
Related MDT
Jim Cramer Advises His Viewers On Cisco, Microsoft And More
10 Biggest Price Target Changes For Monday
FDA OK's Medtronic's Valiant Navion TEVAR device (Seeking Alpha)

Medical device maker Medtronic PLC (NYSE: MDT)'s rocketed higher after the company reported first-quarter earnings Tuesday.

The Analyst

Bank of America Merrill Lynch analyst Bob Hopkins reiterated a Buy rating  on Medtronic and increased the price target from $98 to $105.

The Thesis

MDT shares were up 18 percent in 2018, and the rise is due to an overly conservative revenue growth outlook, allowing the company to beat expectations for three consecutive quarters, Hopkins said in a Wednesday note. (See the analyst's track record here.) 

“MDT has also greatly improved the clarity of its guidance and has delivered on margin promises, but revenue growth upside has been the most significant driver of the stock," Hopkins said. "While we expect growth to slow in absolute terms going forward, we think the Street continues to underestimate MDT’s growth outlook." 

Concerns about competition in businesses such as deep brain stimulation have caused many investors to overlook strong growth in other areas, the analyst said. 

“Going forward, we expect MDT’s growth to slow in diabetes, stents, spinal cord [stimulation] and other areas, although it has many businesses that will accelerate and allow MDT to exceed expectations and keep growth in the 4-6-percent range." 

Growth catalysts include MDT’s new aspiration catheters, the WRAP-IT study, a new spine robot, LVAD indications and the pacer franchise, according to BofA. 

Price Action

MDT shares were 0.32 percent at $95.49 at the time of publication Wednesday.

Related Links:

The Week Ahead In Biotech: Conferences, PDUFA Dates And Earnings

3 Reasons Why Nevro Corp. Was Downgraded By Morgan Stanley

Photo courtesy of Medtronic. 

Latest Ratings for MDT

Oct 2018BarclaysInitiates Coverage OnOverweight
Oct 2018ArgusMaintainsBuyBuy
Aug 2018ArgusMaintainsBuyBuy

View More Analyst Ratings for MDT
View the Latest Analyst Ratings

Posted-In: Bank of America Merrill Lynch Bob HopkinsAnalyst Color Health Care Price Target Reiteration Analyst Ratings General Best of Benzinga


Related Articles (MDT)

View Comments and Join the Discussion!

Latest Ratings

VIABImperial CapitalUpgrades29.0
CDNSJP MorganUpgrades51.0
EBAYRBC CapitalDowngrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Cramer: The Bull Run Survived These 10 Challenges

Q3 Earnings Preview: Canadian Imperial Bank