Medtronic (MDT) Stock Up, Added to Goldman's 'Americas Conviction Buy List'
NEW YORK (TheStreet) -- Medtronic (MDT) - Get Report shares are gaining 0.22% to $74.37 on Friday after Goldman Sachs this morning added the medical devices company to its "Americas Conviction Buy List."
The firm cited improving end-markets, new product launches, and financial flexibility.
Analysts added that the company has the "strongest fundamentals it has seen in nearly a decade."
However, risks to these upsides include deal integration, market share changes and new product development, according to the firm's note.
Based in Dublin, Ireland, Medtronic manufactures and sells device-based medical therapies worldwide.
Separately, TheStreet Ratings team rates MEDTRONIC PLC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate MEDTRONIC PLC (MDT) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MDT's very impressive revenue growth greatly exceeded the industry average of 37.3%. Since the same quarter one year prior, revenues leaped by 70.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 163.22% to $816.00 million when compared to the same quarter last year. In addition, MEDTRONIC PLC has also vastly surpassed the industry average cash flow growth rate of -42.51%.
- MDT's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.98 is very high and demonstrates very strong liquidity.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: MDT