Long Trade Idea
Enter your long position between $79.26 (Friday’s intra-day low) and $80.92 (the intra-day high of its last bullish candlestick).
Market Index Analysis
Medtronic (NYSE:MDT) is a member of the S&P 100 Index and the S&P 500 Index.
Both indices trade off their all-time highs, with rising bearish trading volumes and falling bullish trading volumes.
The Bull Bear Power Indicator for the S&P 500 Index is bearish and remains below its descending trendline.
Market Sentiment Analysis
Equity futures are rising this morning, and oil is tumbling after the US and Iran agreed to sign a memorandum of understanding, electronically, this Friday in Switzerland. It adds to the renewed bullish AI sentiment following the successful IPO of SpaceX (NASDAQ:SPCX), which surged over 19% and added another 3% in after-market hours on Friday. While a path to the end of the war will remove a significant obstacle, rising macroeconomic issues remain.
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Medtronic Fundamental Analysis
Medtronic is a medical device company that develops and manufactures innovative technologies and therapies. Its core segments are cardiovascular, medical surgical, neuroscience, and diabetes. It operates in over 150 countries and employs more than 90,000 people.
So, why am I bullish on MDT following its earnings beat?
Medtronic beat revenue and earnings expectations of $9.62 billion and $1.54, reporting $9.81 billion and $1.55, respectively. The 9.9% year-over-year revenue increase was the highest growth in a decade. While the Spine-ABLE ecosystem drove double-digit growth in its cardiovascular portfolio and 8% growth in its core spine portfolio, the FDA-approved Stealth AXiS system adds to my bullishness. I am also bullish on the Hugo Robotic-Assisted Surgery (RAS) system, after it received FDA clearance for urological procedures.
Metric | Value | Verdict |
P/E Ratio | 21.50 | Bullish |
P/B Ratio | 2.10 | Bearish |
PEG Ratio | 1.58 | Bullish |
Current Ratio | 2.54 | Bullish |
ROIC-WACC Ratio | Negative | Bearish |
Medtronic Fundamental Analysis Snapshot
The price-to-earning (P/E) ratio of 21.50 makes MDT an inexpensive stock. By comparison, the P/E ratio for the S&P 500 is 32.01.
The average analyst price target for MDT is $98.00. This suggests that there is excellent upside potential with reasonable downside risks.
Medtronic Technical Analysis
Today’s MDT Signal
Medtronic Price Chart
The MDT D1 chart shows price action inside a bullish price channel.
It also shows price action trading between its descending 50.0% and 61.8% Fibonacci Retracement Fan levels.
The Bull Bear Power Indicator is bullish but with a descending trendline.
The average bullish trading volumes are higher than the average bearish trading volumes.
MDT outperformed the S&P 500 Index, a notable bullish confirmation.
My MDT Long Stock Trade
MDT Entry Level: Between $79.26 and $80.92
MDT Take Profit: Between $98.77 and $102.51
MDT Stop Loss: Between $71.64 and $73.31
Risk/Reward Ratio: 2.56
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