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Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
An All-In-One Guide for Trading Metals (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
An All-In-One Guide for Trading Metals (Ad)pixel
NIH to fund unproven ALS drugs under patient-backed law
Russia blindfolds, detains Ukraine nuclear plant chief
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
An All-In-One Guide for Trading Metals (Ad)pixel
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
An All-In-One Guide for Trading Metals (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
An All-In-One Guide for Trading Metals (Ad)pixel
NIH to fund unproven ALS drugs under patient-backed law
Russia blindfolds, detains Ukraine nuclear plant chief
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
An All-In-One Guide for Trading Metals (Ad)pixel
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
An All-In-One Guide for Trading Metals (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
An All-In-One Guide for Trading Metals (Ad)pixel
NIH to fund unproven ALS drugs under patient-backed law
Russia blindfolds, detains Ukraine nuclear plant chief

Are Medtronic And Intuitive Surgical Poised For Big Growth?

Medtronic And Intuitive Surgical stockBelieve it or not, the health care sector is actually one of the better performers in 2022, with medical device makers Medtronic (NYSE: MDT) and Intuitive Surgical (NASDAQ: ISRG) outperforming the broader sector in the past month. 

The Health Care Select Sector SPDR ETF NYSEARCA: XLV) is down 6.48% year-to-date. Here are the biggest sector components and their return this year:

Those numbers help explain the broader sector performance. However, a wide variation of business models within the sector also plays a role. For example, health insurers are among the best-performing sub-industries within medical. While UnitedHealth has clearly been strong, stocks like Centene (NYSE: CNC) and Cigna (NYSE: CI) are doing even better. 

So where does that leave medical device makers? 

Medtronic manufacturers a diversified portfolio of products, including diabetes treatments, insulin pumps, and cardiovascular devices, such as pacemakers. With a market capitalization of $124.34 billion, it’s the biggest pure-play medical gear maker.  
Are Medtronic And Intuitive Surgical Poised To Post Stronger Growth?

Postponed Surgeries


The stock has returned 4.58% in the past month, an improvement over its one-year and even three-year returns. The stock suffered more than some in other industries due to Covid restrictions, as elective surgeries were postponed. It did not regain its January 2020 levels until April 2021. 

More recently, it’s been in correction mode for nearly a year, and is down 5.5% since its last earnings report, in late May.

Medtronic is due to report on August 23, before the opening bell. Analysts expect earnings per share of $1.12 on revenue of $7.43 billion. According to MarketBeat’s earnings history for the stock, Medtronic missed both top-and bottom-line views in the most recent quarter. 

MarketBeat’s analyst ratings show that Wall Street has a “hold” rating on the stock, with a price target of $117.13, which would mark a 25.17% upside. Given that those price targets take a 12-to-18-month view, investors should carefully consider whether they want to deploy cash to a stock that’s currently languishing well below that number. That’s not just true for Medtronic, but for any stock. 

Meanwhile, fellow medical device maker Intuitive Surgical has posted the following returns: 

  • One month: +14.52%
  • Three months: +6.35%
  • Year-to-date: -33.45%

The company is well known for its da Vinci robotic surgical systems. Like Medtronic, Intuitive Surgical’s growth slowed in 2020 due to curtailment and postponement of many procedures. Growth rates have been erratic since an initial rebound that began in the last quarter of 2020, but analysts still have optimism about the company’s long-term prospects. 

It’s expected that Covid will continue receding, at least in virulence, and the uptick in medical procedures that occurred in the most recent quarter will also continue. In addition, analysts who cover the company expect to see growing adoption of Intuitive Surgical’s products, particularly among existing customers. 
Are Medtronic And Intuitive Surgical Poised To Post Stronger Growth?

Earnings Rebound Ahead? 

Wall Street is eyeing a 6% earnings decline for the full year of 2022, to $4.65 per share. However, that’s expected to bounce back next year, with earnings of $5.48 per share.

Intuitive Surgical topped analysts’ earnings views in 12 of the past 13 quarters. It met views in the quarter ended in December 2021. The last time the company missed earnings expectations was in April 2019, according to MarketBeat data. 

In a sign that the company itself is eyeing growth, it is currently planning to expand its headquarters in Sunnyvale, California, just two years after a previous expansion. 

MarketBeat analyst ratings show a “moderate buy” designation for the stock, with a price target of $273.23, representing an upside of 14.91%. Since July 15, 10 analysts lowered their price target on the stock. 

So is Intuitive Surgical a buy, given the long-term expectations? 

As always, you must consider what other holdings are in your portfolio, and what your goal is with any particular stock. For example, if you already have high exposure to another medical gear maker, such as Medtronic, decide whether it’s wise to add a company with a similar business model. As we saw with both companies getting slammed due to Covid, it’s not unusual for an entire sector or sub-industry to suffer because of a development outside the companies control. 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Medtronic (MDT)
3.3652 of 5 stars
$80.75-1.8%3.37%20.87Hold$111.52
Intuitive Surgical (ISRG)
3.3684 of 5 stars
$187.44-0.9%N/A47.69Moderate Buy$268.00
Cigna (CI)
2.9662 of 5 stars
$277.47-1.1%1.61%16.55Moderate Buy$308.82
Centene (CNC)
3.187 of 5 stars
$77.81+0.2%N/A24.70Moderate Buy$98.63
Pfizer (PFE)
2.9994 of 5 stars
$43.76-0.9%3.66%8.56Moderate Buy$57.00
Eli Lilly and (LLY)
2.7028 of 5 stars
$323.35-2.0%1.21%51.57Moderate Buy$333.82
UnitedHealth Group (UNH)
3.1413 of 5 stars
$505.04-0.7%1.31%26.37Moderate Buy$586.40
Johnson & Johnson (JNJ)
2.4568 of 5 stars
$163.36-0.7%2.77%23.78Moderate Buy$189.78
AbbVie (ABBV)
2.3815 of 5 stars
$134.21-6.0%4.20%19.01Moderate Buy$159.35
Health Care Select Sector SPDR Fund (XLV)N/A$121.11-1.4%2.01%N/AN/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Medtronic right now?

Before you consider Medtronic, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Medtronic wasn't on the list.

While Medtronic currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Kate Stalter

About Kate Stalter

Contributing Author: Retirement, Asset Allocation, and Tax Strategies

Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies. Kate also serves as a capital-markets contributor at Forbes.com, and is an expert columnist for the investment advisory channel at U.S. News & World Report.
Contact Kate Stalter via email at stalterkate@gmail.com.
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