Boston, MA 06/09/2014 (wallstreetpr) – Investment advisor Goldman Sachs Group Inc (NYSE:GS) sees multiple years of new products coming out from the staple of medical technology company, Medtronic, Inc. (NYSE:MDT). This is expected to add to its baseline growth.
New Products
The brokerage has participated in the company’s analyst meeting that focused on four primary growth drivers such as capital allocation, emerging markets, product pipelines, and size or scale. On the whole, Medtronic, Inc. (NYSE:MDT) continued to convince analysts that its diversified model of depth, as well as breadth, provides a competitive advantage, even as healthcare companies are on consolidation mode. The investment community wanted to know from the medical technology company the quantifiable effect to its financial results, as a result, of this continued tactics.
Important Aspects
The brokerage summed up four key aspects from the analyst meeting that the company had recently. This included Medtronic has multiple years of new product launches, which should add 1 – 3 percentage points to baseline growth in the range of 3.0 – 3.5%.
Secondly, emerging markets, which accounts of 13% of its total revenue, has witnessed a slender improvement recently after a deceleration period. However, Goldman Sachs Group Inc (NYSE:GS) analyst believes that Medtronic is well positioned to take advantage of long-term opportunity available in these markets.
The investment advisor thinks that the company will have to exhibit a better relative uptick compared to rivals to prove its argument of size or scale is crystallizing as customers consolidate.
The fourth aspect, capital allocation is with regard to its unchanged priorities with Medtronic, Inc. (NYSE:MDT) management reaffirming its commitment to return half of its yearly FCF to shareholders using merger and acquisition route on a selective basis.
Rating
Goldman Sachs Group Inc (NYSE:GS) has retained its buy rating on faster growth compared to attractive valuation. The brokerage has kept one year price tag of $68 that is arrived from 14×2015 estimated calendar year cash earnings per share, DCF and SOTP.
The investment advisor listed four possible risk factors that include cost management, pipeline development, forex and competitive dynamics for any downside.
