Medtronic (MDT) Stock | Selling Continues On Earnings Beat


Medtronic PLC (NYSE: MDT)


Earnings Report

Before the market opened Thursday, Medtronic PLC (MDT) reported earnings for the quarter ending July 31 of $1.02 per share on $7.27 billion in revenue, a 12% increase from same period last year, toping analyst expectations of $1.01 per share on $7.06 billion in revenue. Share prices got a nice pop in the premarket and opened the day up just shy of a percent before dumping at the market open and erasing all gains. MDT said revenues were boosted this quarter due to the completed $50 billion acquisition of Covidien and reiterates FY 16 revenue growth outlook and EPS guidance.

“Our first quarter results represent a strong start to fiscal year 2016, with all four of our groups contributing to revenue growth that was at the upper end of our goal when adjusted for the extra week. We are driving solid growth in the United States and seeing broad acceptance of our innovative therapies around the world,” said Omar Ishrak, Medtronic chairman and chief executive officer. “We continue to strengthen and geographically diversify our businesses and remain confident in both our outlook for the remainder of the year and our long-term competitive position in the changing healthcare environment.”

Analyst remain optimistic on MDT with an average price target of $86.55 which is over 10 points away from current market prices and Jim Cramer, co-manager of Action Alerts PLUS portfolio, said “Medtronic’s cardiovascular devices saw impressive growth and Medtronic’s acquisition of Covidien is really starting to pay off, this stock can go higher.” TheStreet. Overall, this was a great earnings report for Medtronics and leaves us plenty of reason to remain optimistic on the company going forward. Look for this weakness in the market to provide great opportunities to get this stock on sale.


MDT Technicals

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Technically MDT has been fairly uneventful for 2015 with a lot of consolidation in the mid $70 price range but what’s really interesting is that a Death Cross occurred on their chart this week. That is generally not a good sign for share prices and gives traders something to pay attention to especially since the market has been so weak lately. Shares started the year at $72.13 and peaked out at the end of March at $79.50 with lows of $55.54 due to the market selling off as a whole in recent weeks. Today prices started off positive but due to market weakness again shares slid into the negative and finished at $69.98, down just over 2% from yesterdays close and 3% on the year. I would like to see prices hold the $70 range and bounce up from there. If we keep trading lower from these prices I don’t see any support until around the $65 range.



About Medtronic PLC

Medtronic Plc engages in the medical technology-alleviating pain, restoring health, and extending life for millions of people around the world. Its primary customers include hospitals, clinics, third-party health care providers, distributors, and other institutions, including governmental health care programs and group purchasing organizations. The company operates through four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group and Diabetes Group. The Cardiac and Vascular Group consist of three divisions : Cardiac Rhythm & Heart Failure, Coronary & Structural Heart and Aortic & Peripheral Vascular. The Minimally Invasive Technologies Group consists of two divisions: Surgical Solutions and Patient Monitoring and Recovery. The Restorative Therapies Group consists of four divisions: Spine, Neuromodulation, Surgical Technologies and Neurovascular. The Diabetes Group consists of three divisions: Intensive Insulin Management, Non-Intensive Diabetes Therapies and Diabetes Services & Solutions. The company was founded in 1949 and is headquartered in Dublin, Ireland. MarketWatch