Medtronic CEO to Speak at Conference - Analyst Blog
December 27 2011 - 10:15AM
Zacks
Leading medical devices player,
Medtronic (MDT) has decided to participate in the
annual JP Morgan Healthcare Conference on January 9, 2012. The
company will be represented by its chairman and CEO, Omar Ishrak,
at the conference.
The Minneapolis based company
continues to face significant challenges as its core segments, ICDs
and Spinal, accounting for 40% of the business, are on a declining
trend. The situation becomes more challenging with the current
economic uncertainty and austerity measures adopted in various
countries. This is not typical of Medtronic alone and its peers
Boston Scientific Corporation (BSX) and St
Jude Medical (STJ) are also facing the brunt.
Despite several challenges, the
company is undertaking initiatives to revive its top line. This
includes penetration of international markets, portfolio expansion
and restructuring initiatives, which should benefit the company
over the long term. Medtronic has witnessed greater contribution
from recently launched products along with strong growth from
international markets. We believe the company will discuss these
strategies at the upcoming conference.
Over the past few years, Medtronic
has been reallocating resources toward new therapies to drive
growth. Meaningful acquisitions made over the last few quarters
include Ardian, Invatec, Osteotech and ATS Medical. About 60% of
its business is growing at 8% (on a combined basis) fueled by new
products, which in turn triggered pricing gains and market
expansion. These businesses are already contributing to the
company’s growth profile and are expected to be a larger force
going forward.
Medtronic’s focus on globalization
is prompted by the opportunity rife in international destinations,
especially in the emerging markets. These markets recorded 20%
growth during the most recent quarter, a trend that is expected to
continue into 2012. The quarter marked the 11th straight
period of generating more than 20% growth in China. Collectively,
India, Brazil and China having grown nearly 20% annually over the
past four years, with health care becoming a national priority, now
represent 10% of total revenues.
The company also resorted to
restructuring to align its cost structure with the current market
conditions and prepare the groundwork for long-term growth. To
achieve this objective, Medtronic decided to scale back
infrastructure in slower growing areas with increasing investment
in niches with potential such as emerging markets and new
technologies.
We are currently Neutral on
Medtronic, in line with the short-term Zacks #3 Rank (Hold).
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
SJM (NYSE:STJ)
Historical Stock Chart
From Aug 2024 to Sep 2024
SJM (NYSE:STJ)
Historical Stock Chart
From Sep 2023 to Sep 2024