DBS analyst Nico Chen has maintained their neutral stance on MDT stock, giving a Hold rating on March 20.
Nico Chen has given his Hold rating due to a combination of factors impacting Medtronic’s financial performance and market position. Medtronic is facing significant challenges, including a decline in net profit margins from 16.6% to 11.4% over the past four years, largely due to inflation, increased labor, and material costs. These financial pressures have resulted in a decrease in net profits from USD 4.6 billion to USD 3.7 billion during the same period.
Additionally, Medtronic’s insulin pump market is under threat from the rising popularity of GLP-1 drugs, which offer a more convenient treatment option for type 2 diabetes patients. This shift could potentially phase out 50% of Medtronic’s insulin pump sales. Furthermore, the company’s R&D capabilities are constrained by high interest rates, limiting its ability to innovate and launch new products, which are crucial for boosting its share price. These factors contribute to the Hold rating, with a target price of USD 90, reflecting the ongoing headwinds Medtronic faces.
Based on the recent corporate insider activity of 61 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MDT in relation to earlier this year.