Medtronic, Inc. (MDT) PT Lowered to $125 at Stifel

Stifel analyst Rick Wise lowered the price target on Medtronic, Inc. (NYSE: MDT) to $125.00 (from $128.00) while maintaining a Buy rating.

The analyst commented, "Yes. We had hoped that Medtronic’s F4Q22 (Apr.) would show more visibly-positive signs of CEO Geoff Martha’s positive transformation initiatives, but macro pressures once again obscured the company’s ongoing transformation. Breaking down the pressures driving that created the sales/EPS miss, management noted that 75% stemmed from the supply chain difficulties, 15% from Chinese lockdowns and volume-based-pricing pressures, and 10% due to FX. Difficulty procuring both semiconductors and certain resin types limited sales of products throughout the Medtronic portfolio, but most notably within the Surgical Innovations/MedSurg business (28% of F2022 sales). Thus, F4Q22 sales at ~$8.1B missed our $8.5B estimate by roughly $370M (~4.5%) and EPS at $1.52 per came in below our $1.57. These developments clearly are disappointing. But Medtronic noted resolution initiatives are well underway. Given these multiple moving pieces, MDT guided for an unusually soft F1Q23 (July), with sales declining 5.5-6.5% Y/Y on an organic basis."

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