Medtronic (MDT) is moving its pipeline away from mature markets and currently leads in some niche indications, but the move is slow and valuation is low, with some obstacles on the way that make some investors sit on the sidelines while Steven M. Lichtman, Managing Director and Senior Analyst at Oppenheimer & Co. Inc., recommends the medical device company.
“The one large-cap name that we have been recommending to investors is Medtronic, predominantly for two reasons: One, expectations have been pretty low for this company over the last few years. Two, their pipeline has a lot of unique factors to it over the next couple of years, and that will allow them to continue their shift away from some of those more mature markets. In particular, they are leading the way in the renal denervation market,” Lichtman said.
Lichtman says medical device companies have seen a stabilization in the U.S., especially in the markets where there was a slowdown on volume and price. He says MDT‘s performance has been slower in the beginning on 2013, but still recommends the stock.
“Medtronic in particular, when they reported earnings a few days ago, seemed to indicate that perhaps things are a little slower in January. Now, one month does not make a trend, but I think that has certainly raised some concern among investors for the whole group,” Lichtman said.
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