On Tuesday, Truist Securities revised its price target Medtronic , Inc. (NYSE: ) is a global leader in medical technologies, services and solutions. The company has lowered its price target to $85 from $88 previously, while retaining a hold rating on the stock.
The change was made after taking into account Medtronic’s earnings prospects and its position relative to its peers. The new price target is based on 15 times the company’s projected 2025 earnings per share (EPS).
This is down slightly from the previous 15.5x. The rationale behind this multiple is that it represents a discount to larger, diversified comparable companies, which typically trade at 20x P/E.
The analysts’ decision to impose the discount was based on Medtronic’s median (MSD) earnings-per-share growth outlook, which is below the peer average. Despite the conservative valuation, analysts said there is still potential for the P/E ratio to expand. The expansion hinges on Medtronic’s ability to gain greater visibility into its revenue and earnings-per-share growth acceleration or to demonstrate significant earnings-per-share upside.
The analyst’s comments highlight the potential for an increase in Medtronic’s valuation if it can show a stronger growth trajectory or beat earnings expectations. As reflected in this Hold rating, current market sentiment suggests a cautious but wary approach to Medtronic’s recent stock performance.
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