Medtronic plc (NYSE: MDT) has confirmed its fiscal second-quarter 2022 earnings date, which will be on Tuesday, November 23, 2021.
What to look for
When the company released its Q1 2021, it topped earnings estimates, and in the past four trailing quarters, the stock has surpassed estimates in each quarter with an average earnings surprise of 13.85%. In the first quarter, the company reported a robust rebound in demand across its core segments. However, in Q2 2022, there has been a gradual slowdown in procedure volume across various segments, and the Delta strain of COVID-19 is expected to have affected business in Q2 2022. Nevertheless, the company is expected to post Q2 2022 results showing YoY market share growth, especially in Cardiac Rhythm Management Segment.
Earnings: Stockearning’s Estimated EPS for Q1 2022 is expected to be around $1.29 per share, representing a YoY growth of 26% from $1.02 per share reported in Q1 2021. Historical EPS Performance for the past 12 quarters demonstrates that the company has topped EPS estimates 11 times (91%) and missed once (8%).
Revenue: The company expects to post revenue of $7.93 billion in fiscal q2 2022, representing a YoY growth of around 4%. In the first quarter of fiscal 2022, the company had global revenues of $7.99 billion, representing a YoY growth of 19%. In addition, the company expects organic revenue to increase by 9% YoY for the full year, and Medtronic anticipates fiscal 2022 revenue to increase by $100M to $20M.
Stock movement: Since the last earnings release, Medtronic stock has lost 8.3%. Medtronic stock has been DOWN 25 times out of the past 47 quarters after the earnings release. So, the historical price reaction suggests a 53% probability of the share price going DOWN once MDT releases Q3 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 2%, while the predicted move on the seventh day is 3%.
What analysts are saying
Morgan Stanley analyst David R. Lewis maintained a "Buy" rating on Medtronic and gave a base price target of $154 with a high of $177. Lewis noted that the Proposed Treasury rules on inversion may lead to extra financing costs on Medtronic but are unlikely to derail the transaction completely. If treasury block hopscotch loans as suggested, the company may use its $15 billion OUS cash to finance the deal.
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