Oppenheimer Maintains Outperform On Medtronic On The Back Of Financial Plans


In a research note issued today to investors, Oppenheimer analyst Steven Lichtman maintained an Outperform rating on Medtronic (NYSE:MDT) with a $73 price target, as the company reaffirmed its commitment to the COV acquisition, indicating that it will raise $16B of debt to satisfy the cash component of the deal in place of OUS cash that has been blocked by the Treasury’s regulations on intercompany loans.

Lichtman noted, “With the new debt cost being somewhat offset by increased investment income, a 2 pt improvement to tax rate (1 pt previously) and a more accelerated cost synergy timeline versus our previous estimate, we still look for 2-3% accretion to cash EPS in FY16 (vs. 4% previously). MDT also confirmed our assumption that it continues to expect its available US FCF to shift from 30-35% pre-deal to 60%+ post, providing more US cash flexibility.”

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 3.8% and a 54.2% success rate. Lichtman has a 15.7% average return when recommending MDT, and is ranked #1365 out of 3315 analysts.

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