Oppenheimer Raises Medtronic Price Target Following Fiscal 2Q15 Earnings

In a research report issued yesterday, Oppenheimer analyst Steven Lichtman reiterated an Outperform rating on Medtronic (NYSE:MDT) and raised his price target to $78 (from $73), following the company’s fiscal second-quarter results.¬†

Lichtman¬†n0ted, “MDT’s proposed acquisition of COV provides synergy opportunities and increased free cash flow. Expense synergies plus cost savings programs should drive 10% cash EPS growth pro forma over the next few years. With stabilizing core business end-markets and as MDT is hitting its earnings targets, we believe investors are turning their focus to MDT’s long-term drivers, both geographic (emerging markets) and product (US CoreValve, new diabetes platforms, etc.).

“Our $78 target price is driven by DCF and implies a calendar 2015E P/E multiple of 17x our cash EPS estimate for combined MDT/COV, in line with peers.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Steven Lichtman has a total average return of 3.6% and a 61.8% success rate. Lichtman has a 16.6% average return when recommending MDT, and is ranked #1347 out of 3377 analysts.

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