By Joe Carlson Star Tribune-May 8, 2018
Medtronic hired one of Wall Street’s best-known medical-technology stock analysts on Monday, with the goal of translating revenue growth into better stock performance. The stock price climbed nearly 5 percent on the news.
In a conference call with investors Monday morning, former JPMorgan Chase analyst Michael Weinstein said he has accepted a job as senior vice president of strategy at Medtronic, reporting to Chief Financial Officer Karen Parkhill. Weinstein is already deeply familiar with the complicated industry, having served as JPMorgan’s senior analyst covering med-tech companies including Medtronic, since 1995.
“We’re very excited to welcome Mike Weinstein. I couldn’t be more pleased that he decided to join our company,” said Medtronic CEO Omar Ishrak, who has often answered questions from Weinstein on earnings calls. “He will bring a new perspective that we know will enhance our growth strategies.”
Medtronic stock rose 4.6 percent Monday, closing at $84.82 on a day when the S&P 500 stock index was flat.
Analysts said the magnitude of Medtronic’s stock bump Monday could be a reflection of some market frustration with Medtronic.
Medtronic’s revenue growth has met Wall Street expectations since acquiring Covidien for $50 billion three years ago, but that has not translated into bottom-line growth that investors wanted to see.
During 2017, Medtronic’s stock price rose about 14 percent — trailing other large medical-supply peers, like Baxter (up 45 percent in 2017), BD (up 30 percent) and Abbott (up 46 percent). The S&P 500 index itself rose more than 18 percent last year.
“They’ve definitely underperformed over the past couple of years, relative to their peers,” said Raj Denhoy, an analyst who covers Medtronic for Jefferies Group.
Medtronic’s decision to have a conference call to announce Weinstein’s hiring Monday shows how seriously the company takes the idea of needing to improve shareholder value. “It seems to be a high priority for the company,” Denhoy said.