Medtronic Expected to Report Strong Earnings

Medtronic is poised for a potential uptick in its stock price following the announcement of its Q1 results, with revenues and earnings expected to slightly surpass Wall Street estimates. The company is likely to benefit from an increase in procedure volumes and the expansion of its new product offerings. Despite these positive indicators, Medtronic's stock has experienced a significant decline of 25% since early January 2021, currently trading around $80, in stark contrast to a 45% increase in the S&P 500 during the same period. Over the past three years, Medtronic's stock has consistently underperformed the broader market, with returns of -10% in 2021, -23% in 2022, and a modest 10% in 2023. In comparison, the S&P 500 saw returns of 27% in 2021, -19% in 2022, and 24% in 2023. This trend highlights Medtronic's struggle to keep pace with market performance, particularly when juxtaposed with the Trefis High Quality Portfolio, which has outperformed the S&P 500 annually. Currently, Medtronic's stock trades at a price-to-earnings ratio of 15x, slightly below its three-year average of 16x. The company reported a 7% year-over-year decline in adjusted earnings per share, totaling $1.46. While growth was noted in its Diabetes, Neuroscience, and Medical Surgical segments, a 5.2% decline in Cardiovascular sales offset these gains. Looking ahead, Medtronic projects organic sales growth of 4% to 5% for 2025, with adjusted earnings expected between $5.40 and $5.50 per share. As the company navigates these challenges, comparisons with industry peers will be crucial for assessing its competitive standing.