What happened
A blast of analyst price target cuts hit Medtronic (MDT 0.62%) stock on Friday, one trading session after the company published its latest set of quarterly earnings. Both the market and several prognosticators were unimpressed with these, despite the beats on both the top and bottom lines. As a result, Medtronic's shares lost 2.5% of their value; this compared quite unfavorably to the 1.3% gain of the S&P 500 index on the day.
So what
Although Medtronic's fourth quarter of fiscal 2023 beats were encouraging, investors tend to look forward and not back when evaluating stocks. And that was a problem, as the specialty healthcare company's guidance was found wanting.
Investors reacted by trading out of the stock, while the more bearish analysts shaved their price targets. One cutter was Truist Securities' Richard Newitter, who trimmed $3 off his estimation for a new level of $90 per share. Newitter maintained his buy recommendation on the stock as he did so.
An even milder move was made by Bernstein's Lee Hambright; he knocked a mere $1 from his price target to land at $99 per share. Hambright is more positive about Medtronic's future than his Truist peer, as he kept his outperform (buy) recommendation intact.
Now what
It has to be mentioned that other analysts went in different directions by either raising their Medtronic price targets or reiterating their existing levels and recommendations.
In the latter category was Deutsche Bank's Pito Chickering, who in maintaining his hold rating and $87 price target wrote in a new note that "As we look at 4Q results and FY 2024 guidance, we believe that MDT could be setting conservative guidance but the lack of a big beat and guidance below the Street doesn't scream that the stock has found its floor yet."
