Medtronic stock hit with 2 downgrades after disappointing results, guidance By Investing.com

By Senad Karaahmetovic

At least two sell-side analysts cut their rating on Medtronic (NYSE:) stock on Wednesday after the company’s shares closed over 5% lower yesterday following disappointing .

Medtronic cut its full-year profit guidance to reflect macro pressure and FX headwinds. The company also reported a drop in revenues of 3.3% year-over-year.

“Slower than predicted procedure and supply recovery drove revenue below our expectations this quarter,” Geoff Martha, Medtronic chairman and CEO, said in the press release.

Karen Parkhill, Medtronic’s chief financial officer, added:

“We continue to expect organic revenue growth acceleration, with the second half growing faster than the first. However, given a slower pace of market and supply recovery, we’re reducing our revenue expectations for the remainder of the year.”

Following yesterday’s news, Citi and Oppenheimer downgraded Medtronic stock to send shares nearly 1% lower today.

Citi analysts downgraded to Neutral from Buy with a price target of $85 per share, down from $108.

“It is getting harder for us to support the stock,” they said in a downgrade note.

“This was one of those quarters when investors (and we) question the ability of Medtronic to deliver MSD revenue growth over time. While we believe that management has a handle on the headwinds negatively impacting FY2Q23 resulting in the FY23 guide down, the timing to resolution is less certain,” the analysts added.

Similarly, Oppenheimer analysts moved to Market Perform from Outperform with an $85 price target.

“We continue to see solid long-term pipeline opportunities and valuation is supportive, but with visibility on near-term fundamentals still low, we step to the sideline,” they wrote.

With Medtronic shares trading below $80 apiece, the bears are now eyeing a move toward multi-year lows at $72.13.