This Analyst Says Medtronic Has Better Opportunity Elsewhere In MedTech

RBC Capital Markets downgraded Medtronic Plc MDT from Outperform to Sector Perform and cut its price target to $89 from $102, citing mixed sentiments for the stock.
The analyst notes investor disappointment regarding management's execution on several fronts, including warning letter, supply impact, RDN, slower pace of recovery, and persistent macro headwinds.
The company lowered its FY23 organic growth outlook due to supply constraints and slower recovery in certain sub-segments.
Related: Medtronic Trims FY23 Annual Outlook On Currency Headwind, Posts Mixed Q2 Earnings.
While the RDN opportunity is still intact, it will take longer to accrue sales as it may/may not require an FDA Panel in 1H'CY23 to get approval, followed by reimbursement, both of which could take well over a year.
Secondly, Medtronic will have to get an indication-by-indication approval for Hugo as supply constraints hit the U.S. study.
The analyst notes that the urology indication is among the mature robotic procedure categories.
Price Action: MDT shares are down 4.07% at $77.61 on the last check Monday.

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