This Analyst Says Medtronic Has Better Opportunity Elsewhere In MedTech

  • RBC Capital Markets downgraded Medtronic Plc MDT from Outperform to Sector Perform and cut its price target to $89 from $102, citing mixed sentiments for the stock.
  • The analyst notes investor disappointment regarding management's execution on several fronts, including warning letter, supply impact, RDN, slower pace of recovery, and persistent macro headwinds. 
  • The company lowered its FY23 organic growth outlook due to supply constraints and slower recovery in certain sub-segments.
  • Related: Medtronic Trims FY23 Annual Outlook On Currency Headwind, Posts Mixed Q2 Earnings.
  • While the RDN opportunity is still intact, it will take longer to accrue sales as it may/may not require an FDA Panel in 1H'CY23 to get approval, followed by reimbursement, both of which could take well over a year.
  • Secondly, Medtronic will have to get an indication-by-indication approval for Hugo as supply constraints hit the U.S. study.
  • The analyst notes that the urology indication is among the mature robotic procedure categories.
  • Price Action: MDT shares are down 4.07% at $77.61 on the last check Monday.
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