Market Overview

JPMorgan Upgrades Medtronic After String Of Outperformances

Share:
JPMorgan Upgrades Medtronic After String Of Outperformances

After four beat-and-raise quarters, Medtronic PLC (NYSE: MDT) has won a new bull.

The Rating

JPMorgan analyst Robbie Marcus upgraded Medtronic to Overweight and raised his price target from $100 to $109. (See the analyst's track record here.)

The Thesis

Marcus attributes his bullishness to Medtronic’s consistent outperformance and improved free cash flow.

“Over the next 12 to 18 months we believe Medtronic can grow at least in line with its end-markets at ~5% growth, plus we see a number of underappreciated data presentations and transformative new product launches that do not appear to be fully appreciated by the Street,” he wrote in a note.

His model only reflects modest estimate increases for 2020 and doesn't account for the following potential catalysts:
The release of TYRX’s WRAP-IT study results;

  • Data announcements on Extravascular ICD implants;
  • Late-2019 or early-2020 indication expansion for the Micra AV pacemaker;
  • The launch of LINQ II;
  • Development of a deep brain stimulation platform with sensing capabilities; and
  • The 2020 rollout of the 690G hybrid-closed loop insulin pump.

The Micra AV, in particular, is seen to win Medtronic a competitive advantage and average-selling-price premium in mature pacemakers by expanding addressable patients from 16 percent to 56 percent.

Given its general circumstances, Medtronic is seen to have struck an inflection point with opportunity to seize large shares of large markets.

“With improved consistency of execution and a material step-up in FCF generation, the thesis on Medtronic has fundamentally changed to investing in a leading innovator with a multi-year runway for growth upside,” Marcus wrote. “[...] Following a solid year of execution, we now have greater confidence in management delivering above its promised targets.”

Price Action

At time of publication, the stock traded around $92.75 per share.

Related Links:

9 Policy Catalysts For Health Care Investors To Watch Before Year's End

Tandem Diabetes Care Positioned For 20-30% Growth, But Valuation Warrants Neutral Stance

Photo courtesy of Medtronic.

Latest Ratings for MDT

DateFirmActionFromTo
Aug 2019MaintainsHold
Aug 2019MaintainsOutperform
Aug 2019MaintainsBuy

View More Analyst Ratings for MDT
View the Latest Analyst Ratings

Posted-In: JPMorgan Robbie MarcusAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (MDT)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
PTONBank of AmericaInitiates Coverage On29.0
ITRICanaccord GenuityMaintains87.0
GWPHNeedhamInitiates Coverage On200.0
BABairdDowngrades
LUVStifelDowngrades60.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
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.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Federal Reserve Preview: Slowdown Ahead

As Novogratz Sees the Bottom Coming, Cryptos Eye Further Healthy Gains - Confluence Detector