UBS Reiterates Buy on Medtronic (MDT) Following 1Q Report
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UBS reiterated a Buy rating on Medtronic, Inc. (NYSE: MDT), and raised the price target to $96.00 (from $92.00), following the company's 1Q earnings report. Management reiterated F17 guidance of 5-6% top-line adjusted CC growth and EPS guidance of $4.60-4.70.
Analyst Matt Miksic commented, "Management delivered on its F1Q17 guidance of 5.0 – 5.5% adjusted revenue growth (excluding impact of the extra week last year) and its 'down slightly' EPS guidance by 2c (including +2c from tax and -1c from other non-op expenses). There was a 70 bps contribution from acquisitions in the quarter, as expected, and in-line with the 50-100 bps of growth from M&A annually, as laid out in management's long-term plan at the recent investor day. We view the sustainable top line performance as impressive, and continued double-digit CC EPS growth as attractive, particularly given the expanded size of the company (now ~$120 bil market cap). So with more appropriate guidance set on sales growth and EPS, we expect investors to be more focused on these metrics, and we see F17 as less of a hand-wringer than F16 on a quarter-to-quarter basis. We reiterate our Buy rating on top pick MDT, upping our target from $92 to $96. We view weakness post-F1Q results as an attractive buying opportunity."
Shares of Medtronic, Inc. closed at $85.39 yesterday.
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