Needham & Company Cuts Price Target on Medtronic (MDT) as 3Q Revenue Misses Mark

Needham & Company maintained a Buy rating on Medtronic, Inc. (NYSE: MDT), and cut the price target to $88.00 (from $91.00), following the company's 3Q earnings report. Revenue was reported at $6.934B vs. the consensus of $6.987B. Adjusted EPS was reported at $1.06, in-line with consensus estimates. MDT narrowed its FY16 revenue growth guidance to 5.0-5.5% CC from 5.0-6.0% CC and its EPS guidance to $4.36-4.40 from $4.33-4.40 vs. consensus of $4.38.

Analyst Mike Matson commented, "F3Q16 revenue missed consensus while EPS met consensus and MDT narrowed its FY16 guidance. Revenue growth remained strong at 6% CC driven by new products (which added ~350 bps) and emerging markets (which added ~190 bps) where growth increased to 14% from 11% CC in F2Q16. MDT's operating margin was weaker than expected due to currency though this was offset by a lower than expected tax rate. And management indicated that currency could reduce its FY17 EPS by $0.20-0.25. While the results and outlook were mixed, MDT continues to execute on the factors within its control and we reiterate our Buy rating."

For an analyst ratings summary and ratings history on Medtronic, Inc. click here. For more ratings news on Medtronic, Inc. click here.

Shares of Medtronic, Inc. closed at $77.39 yesterday.

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