Medtronic

(MDT) - Get Report

approaches its upcoming quarterly earnings report much the same way it has entered many previous fiscal quarters -- with a reputation for solid growth, a battalion of Wall Street buy recommendations and a sideways-moving stock.

Despite the medical device giant's track record of consistent earnings and sales growth, Medtronic's stock, trading at $49.69 Monday afternoon, is down about 4.5% over the last 12 months. That trails the

S&P 500 Index

, which has gained about 7.9% during the same period. In fact, Medtronic's stock has been essentially flat since the fourth quarter of 2002.

That hasn't seemed to discourage analysts as they await the Minneapolis-based company's first-quarter earnings after the markets close Wednesday. According to Thomson First Call, Medtronic's support on Wall Street borders on reverence: 30 buy recommendations, three hold ratings and two sell recommendations.

"In a summer of uncertainty and stock price declines, we think investors could use a safe port in the storm," said a recent report by Thomas J. Gunderson of Piper Jaffray, who has an outperform recommendation on Medtronic.

Like the consensus view of analysts polled by Thomson First Call, Gunderson is predicting first-quarter earnings per share of 43 cents.

As a testimony to Medtronic's skill for matching -- some cynics might say "managing" -- Wall Street estimates, analysts aren't deviating much from the company's guidance of a first-quarter EPS of 42 cents to 43 cents. Thomson First Call said the Wall Street estimates ranged from 42 cents to 44 cents.

The full Thomson First Call consensus for the first quarter is a profit of $523.9 million, or 43 cents a share, on sales of $2.39 billion. For the same period last year, Medtronic earned $450.4 million, or 37 cents, on revenue of $2.06 billion.

Gunderson likes Medtronic for its size, skill and diversity of products, which enables it to better withstand stock market jolts than its smaller competitors.

(Smaller is in the eye of the investor. Medtronic's key competitors include

Boston Scientific

(BSX) - Get Report

,

Guidant

(GDT)

and

St. Jude Medical

(STJ)

, which have market capitalizations of $27.3 billion, $17.6 billion and $11.5 billion respectively. With a market cap of $59.4 billion, Medtronic is bigger than all of them combined.)

Noting the oft-repeated Medtronic mantra that it seeks to achieve 15% annual growth "over any five-year period," Gunderson said the company's performance "is boring in good times, and an oasis when stock are heading downward." (He doesn't own shares, but his firm is a market maker).

Even analysts with a bit more restrained view of the stock say they can't ignore the company's financial management skills and steady growth. But they wonder if there's anything in Medtronic's immediate future that would jolt the stock up or down.

"Momentum or no-mentum" was the headline of a recent research report by SG Cowen analyst Dhuisini de Zoysa. Although Cowen doesn't issue specific ratings, de Zoysa may still have been influenced by her former job as a medical devices analyst for Fulcrum Global Partners, because her July 20 report for Cowen said she was taking a "neutral view" on the stock. She considers the stock fairly valued at $50 a share. (She doesn't own shares. Her firm says it conducts and/or seeks to do business with companies mentioned in research reports.)

She dismissed what she calls "the popular bull case" that Medtronic's stock could be elevated when and if its experimental drug-coated arterial stent is approved for the U.S. market sometime in 2006.

The drug-coated stent, also known as a drug-eluting stent, is inserted into arteries after a procedure that clears out dangerous plaque. The procedure, called angioplasty, improves blood flow and reduces the risk of a heart attack or stroke. The stent is a mesh-like metal tube that keeps the artery open. It is coated with a drug that is released periodically to reduce arterial scarring and reduce the incidence of reclogging.

The drug-coated stent is rapidly supplanting plain metal stents, which have a higher rate of arterial reclogging. The only companies with drug-coated stents on the market are

Johnson & Johnson

(JNJ) - Get Report

and Boston Scientific. Guidant also is developing a drug-coated stent.

Each company has had problems. J&J encountered manufacturing difficulties when its Cypher drug-coated stent reached the U.S. market in April 2003. For many months, the company's inability to supply enough stents angered physicians and hospitals.

Boston Scientific, whose Taxus stent reached the U.S. market in March, was selling its stents at a torrid pace, but the stock has dropped about 24% since early July when the company announced the first of three recalls involving Taxus and/or a bare metal stent.

And in late May, Guidant's stock fell 11.2% on the day the company said it had run into some design and manufacturing problems with a drug-coated stent. Guidant's stock has been essentially flat since then.

Medtronic's path to FDA approval of a drug-coated stent hasn't been smooth either. In late May, it released clinical test data that the company said indicated a solid performance. But analysts focused on one issue -- the degree to which an artery that has been kept open by a stent narrows over time -- as a reason to worry about the product's ability to compete with other devices. Still, Medtronic's stock fell by less than 2% that day.

Even with its competitors' problems, de Zoysa said she remains "unconvinced" that Medtronic's drug-coated stent, called Endeavor, can boost the stock significantly. "The data we have seen to date has been early-stage and equivocal

and we do not expect to see additional Endeavor data for nine months."

Medtronic's size is its strength and weakness, creating what she calls the "blue-chip blues." Over the next 12 months, de Zoysa said she doubted the stock would appreciate more than 15% unless investors bail out of riskier medical tech stocks and into Medtronic like they did in 2000.