Medtronic Stock (MDT) Slides Despite Corporate Re-Jig to Boost Ailing Valuation
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According to a report in the Wall Street Journal, activist investor Elliott Investment Management has become one of the group's largest shareholders. This followed a series of so-called friendly talks between the pair focused on boosting the company's valuation – currently $119 billion – and how to concentrate on core assets.
The exact size of Elliott's previously undisclosed stake is not known.
Veteran Directors
It is understood that when Medtronic announces its first quarter results later on Tuesday, August 19, it will reveal that veteran med-tech executives John Groetelaars and Bill Jellison will be joining its board as independent directors.
It is also expected to detail the formation of new special committees focused on growth and operations that will include the new directors and be led by Medtronic chief executive Geoff Martha.
One of the new committees will look for so-called tuck-in M&A opportunities, research and development investments and potential divestitures. The other will look for ways to boost earnings growth.
Undervalued Stock
Medtronic develops, manufactures and distributes medical devices and therapies that treat more than 70 health conditions, from Parkinson's to diabetes.
The company, which is based in Ireland but has its operational headquarters in Minneapolis, has seen its shares rise more than 16% so far this year. However, the company is still seen as undervalued, especially for being the biggest med-tech company globally by revenue.
Medtronic booked more than $32 billion in revenue in 2024. In comparison Boston Scientific (BSX), with a larger market value of almost $153 billion, reported about $17 billion in sales last year. Its share price performance is also trailing.
The company has already been making moves to boost its value. It has focused on innovations such as how to treat atrial fibrillation, which has been a huge growth spot in the industry. It is also planning a separation of its diabetes business into a stand-alone group.
Is MDT a Good Stock to Buy Now?
On TipRanks, MDT has a Moderate Buy consensus based on 13 Buy, 12 Hold and 1 Sell ratings. Its highest price target is $109. MDT stock's consensus price target is $98.44, implying a 6.07% upside.
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