Time for Medtronic plc (MDT) Fizzle Or Continue To Sizzle

Stock of Medtronic plc (MDT) opened at $108.00 and last traded at $108.20 x 1300. More than 4,311,343 shares exchanged hands compared to an average daily volume of 4,917,326 shares. At the current pps, the market capitalization stands at 144.614B.

Let’s take a look at how the stock has performed this year so far. Medtronic plc (MDT) has moved 5.98% in the last 5 days or 5.62% in the last 1 month. In long-term, Medtronic plc (MDT) has changed 17.67% in 3 months and  12.78% in this year itself. Below is the chart to get a feel for the recent price action.

 

Fundamentals you simply cannot ignore

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Medtronic plc (MDT) currently has a Beta value of 0.84 . Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent. Next, let’s take a look at Medtronic plc (MDT) current P/E ratio. Medtronic plc (MDT) currently has a PE ratio of 33.07. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at Medtronic plc (MDT) beta and P/E ratio, the EPS cannot be ignored. Medtronic plc (MDT) EPS for the trailing twelve months was 3.26. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Medtronic plc (MDT) is estimated to release its next earnings report on 4 / 2020 (N/A-Not know at this time). It would be interesting to see how the earnings fair out considering the recent developments.

The Analyst Chirp:

Medtronic plc (MDT) has received an average target price from analysts of $108.18 amounting to a recommendation rating of Overweight. That comes from 26 different analysts. Perhaps, the driver for that assessment comes from the company’s valuations. Right now, we are looking at a median price-to-earnings ratio for this calendar year of 18.60. To give a sense of trend, the same data point on the estimate for next year is currently sitting at 17.16 times earnings. Drilling down a bit further, this quarter, we are looking at an average estimate from analysts for earnings per share level of 23.00. That shift to 23.00 heading into next quarter.

 

 

 

 

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