Analyst: Medtronic Stock's Future Growth is Doubtful

Now could be the time to speculate on Medtronic with options

Deputy Editor
Aug 24, 2022 at 10:14 AM
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Raymond James is losing confidence in the growth potential for Medtronic PLC (NYSE:MDT), according to a bear note the firm issued earlier today. The analyst downgraded MDT to "market perform" from "outperform," and while it expects the stock to stay range-bound, the note said: "Supply chain dynamics have disrupted MDT's growth more so than peers, and our concern is that it will take longer for MDT to regain momentum."

While Raymond James withheld a price target, Piper Sandler and Evercore ISI lowered their own price objectives to $105 and $90, respectively, last night. Coming into today, analysts were split on the equity, with nine of 18 calling Medtronic stock a "hold" versus nine that said "buy" or better. Meanwhile, the 12-month consensus target price of $109.29 is a 21.1% premium to last night's close. 

Those looking to bet on Medtronic stock's next move should consider options. The equity's Schaeffer's Volatility Index (SVI) of 23% stands in the relatively low 34th percentile of annual readings, which implies options traders are pricing in lower-than-usual volatility expectations. What's more, MDT's Schaeffer's Volatility Scorecard (SVS) tally of 74 out of 100 implies the equity tends to outperform said volatility expectations.

The equity is down 1% at $89.28 this morning. A mid-July bounce from more than two-year lows was just rejected at the 80-day moving average, with Medtronic stock yesterday shedding more than 3% for its worst session since June. Year-over-year, MDT sports a 29.8% deficit.


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