Needham & Company Cuts Price Target on Medtronic (MDT) as 3Q Revenue Misses Mark
Needham & Company maintained a Buy rating on Medtronic, Inc. (NYSE: MDT), and cut the price target to $88.00 (from $91.00), following the company's 3Q earnings report. Revenue was reported at $6.934B vs. the consensus of $6.987B. Adjusted EPS was reported at $1.06, in-line with consensus estimates. MDT narrowed its FY16 revenue growth guidance to 5.0-5.5% CC from 5.0-6.0% CC and its EPS guidance to $4.36-4.40 from $4.33-4.40 vs. consensus of $4.38.
Analyst Mike Matson commented, "F3Q16 revenue missed consensus while EPS met consensus and MDT narrowed its FY16 guidance. Revenue growth remained strong at 6% CC driven by new products (which added ~350 bps) and emerging markets (which added ~190 bps) where growth increased to 14% from 11% CC in F2Q16. MDT's operating margin was weaker than expected due to currency though this was offset by a lower than expected tax rate. And management indicated that currency could reduce its FY17 EPS by $0.20-0.25. While the results and outlook were mixed, MDT continues to execute on the factors within its control and we reiterate our Buy rating."
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Shares of Medtronic, Inc. closed at $77.39 yesterday.