As one of the largest medical device companies, Medtronic Plc (MDT) develops and manufactures therapeutic medical devices for chronic diseases. Its portfolio includes pacemakers, defibrillators, heart valves, stents, insulin pumps, spinal fixation devices, neurovascular products, advanced energy, and surgical tools.
The company has staged a strong recovery from the impact of the pandemic on elective procedures. MDT is now winning market share in an increasing number of its businesses, driven by differentiated product offerings. For instance, in its Cranial & Spinal Technologies business, the company has gained market share in both Spine and neurosurgery.
MDT has a solid balance sheet with a current ratio of 2.7 and a debt-to-equity ratio of 0.5. The company also has a gross margin of 65.2%, which is above the industry average. In terms of growth, analysts forecast earnings to rise 112.9% year over year in the current quarter.
MDT’s stock looks a bit overpriced with a forward P/E of 22.47. The stock has shown strong long-term momentum since last summer, but performance has been mixed since May as shown in the chart below.
Take a look at the 1-year chart of MDT below with my added notations:
Chart of MDT provided by TradingView
During the past few months, MDT has formed a key level of resistance at around the $128.50 (red) mark. The stock has tested that area multiple times since the end of May and is currently sitting right under that level again.
A solid close above $128.50 should lead to higher prices for MDT. Therefore, a long trade could be entered on a breakthrough of that level.
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MDT shares were unchanged in premarket trading Tuesday. Year-to-date, MDT has gained 10.43%, versus a 18.53% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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