Last week you may have seen that Medtronic plc (NYSE: MDT) released its second quarter results to the market. The initial response was not positive, with stocks falling 2.7% to US $ 114 last week. This is an overall credible result, with revenues of US $ 7.8 billion and statutory earnings per share of US $ 0.97, both in line with analyst estimates, showing that Medtronic is performing as expected. . This is an important time for investors, as they can follow a company’s performance in its report, look at experts’ forecasts for next year, and see if there has been a change in the company’s expectations. business. Readers will be happy to know that we have aggregated the latest statutory forecast to see if analysts have changed their minds on Medtronic after the latest results.
NYSE: MDT Profit and Revenue Growth November 26, 2021
Based on the latest results, the 25 Medtronic analysts currently expect 2022 revenue of US $ 32.4 billion, roughly in line with the past 12 months. Earnings per share are expected to increase 12% to US $ 3.90. Yet before the latest results, analysts were forecasting revenues of US $ 33.0 billion and earnings per share (EPS) of US $ 3.96 in 2022. So it’s pretty clear that although analysts have put to update their estimates, there has been no major change in expectations for the company as a result of the latest results.
There has been no change in revenue or profit estimates or in the price target of US $ 141, suggesting that the company has lived up to expectations in its recent result. The consensus price target is only an average of individual analysts’ targets, so it might be helpful to see the breadth of the range of underlying estimates. There are a few variations of perceptions on Medtronic, with the most bullish analyst valuing it at US $ 155 and the most bearish at US $ 127 per share. The narrowness of the estimates could suggest that the future of the company is relatively easy to assess or that analysts have a solid view of its prospects.
Looking at the big picture now, one of the ways we can make sense of these forecasts is to see how they stack up against both past performance and industry growth estimates. The latest estimates show that Medtronic’s growth rate is expected to accelerate significantly, with an annualized revenue growth forecast of 3.8% through the end of 2022 to be significantly faster than its historical growth. by 0.3% per year over the past five years. Compare that with other companies in the same industry, which are expected to experience revenue growth of 8.9% per year. It is therefore clear that despite accelerating growth, Medtronic is expected to grow significantly slower than the industry average.
The bottom line
The most important thing to remember is that there has been no major change in sentiment, with analysts once again confirming that the company is performing according to their previous earnings per share estimates. On the positive side, there has been no major change in income estimates; although forecasts imply that revenues will outperform the industry as a whole. The consensus price target remained at US $ 141 as the latest estimates were not sufficient to impact their price targets.
With that in mind, we wouldn’t be too quick to draw a conclusion on Medtronic. Long-term earnings power is far more important than next year’s earnings. We have predictions for Medtronic through 2024, and you can view them for free on our platform here.
It is also worth noting that we have found 1 warning sign for Medtronic that you need to take into consideration.
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