BTIG Says Buy The Dip In Medtronic

Shares of medical technology company Medtronic PLC MDT were flirting with the $100 per share mark for parts of 2018, but have since come down to a level that should be taken advantage of by investors, according to BTIG.

The Analyst

Analyst Sean Lavin upgraded Medtronic from Neutral to Buy with a new $100 price target.

The Thesis

During the JPM Healthcare conference last week in San Francisco, BTIG spent time with Medtronic CEO Omar Ishrak and CFO Karen Parkill.

Lavin's primary takeaway was that the executives appeared to be "very conservative" on the impact of worries about paclitaxel and higher mortality signals. The company's management feels "very confident" its devices are safe and has the necessary data to back up the claim, the analyst said.

During the conference, Medtronic lowered its 2019 outlook due to a slowdown in the DCB market from paclitaxel concerns and changes to the LVAD market, Lavin said. This creates a scenario where Medtronic should be able to at the very least match its guidance or even beat it, he said.

Beyond 2019, the company boasts a "broad and rich" pipeline for fiscal 2020 that can help generate at least 4-percent top-line growth in spine, neurovascular, leadless pacing and diabetes, the analyst said. The Street will also view a robotics launch favorably, although the company's ambitions are not yet clear, as such a move could impact surgical margins, he said.