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Medtronic (MDT) Outpaces Stock Market Gains: What You Should Know

Medtronic (MDT) closed at $90.67 in the latest trading session, marking a +0.47% move from the prior day. This move outpaced the S&P 500's daily gain of 0.3%. Meanwhile, the Dow gained 0.46%, and the Nasdaq, a tech-heavy index, added 0.08%.

Heading into today, shares of the medical device company had gained 4.91% over the past month, outpacing the Medical sector's gain of 3.3% and lagging the S&P 500's gain of 5.93% in that time.

MDT will be looking to display strength as it nears its next earnings release, which is expected to be February 19, 2019. On that day, MDT is projected to report earnings of $1.24 per share, which would represent year-over-year growth of 5.98%. Meanwhile, our latest consensus estimate is calling for revenue of $7.55 billion, up 2.46% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.13 per share and revenue of $30.53 billion. These totals would mark changes of +7.55% and +1.93%, respectively, from last year.

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Any recent changes to analyst estimates for MDT should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% lower. MDT currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MDT has a Forward P/E ratio of 17.61 right now. This valuation marks a discount compared to its industry's average Forward P/E of 23.62.

Meanwhile, MDT's PEG ratio is currently 2.4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Medical - Products stocks are, on average, holding a PEG ratio of 2.29 based on yesterday's closing prices.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 72, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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