Morgan Stanley provided color on Medtronic MDT after the company announced its quarterly report. In a research report published today, Morgan Stanley expressed its belief that the earnings per share guidance of $3.43 - $3.50 might be conservative.
In the report, Morgan Stanley states, "Adjusting for the impact of Ardian dilution of $0.04-0.06;
a restructuring benefit of $0.15-$0.18; share buyback of
$0.07; the FY11 tax benefit of $0.10; and the tough
comp from the BSX ship hold of $0.04 yields operating
EPS growth of 1-3%, effectively in-line with sales. While
we were encouraged by in-line GMs in the quarter and
reports of a better pricing outlook in certain segments of
the business, pricing pressure is clearly challenging.
Further, leverage and years of restructuring may leave
little low hanging fruit, though MDT sees further
opportunities to pull costs out of the business. We
expect cost shifting to emerging markets and R&D
efficiency to be key tasks for the incoming CEO."
On Tuesday, Medtronic lost 0.92% to close the day at $40.88. Its shares fared no better in today's pre-market trading, falling 0.59% to $40.64.
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