Recording the biggest intra-day loss since March 2020, Medtronic (MDT-5.0%) shares have reached their lowest level since June after the company indicated a prolonged timeline for a clinical study for Symplicity Renal Denervation System.
With no positive outcome in the interim data analysis, the medical device maker has decided to proceed with the study until its full enrollment.
Despite an overweight rating, Wells Fargo analyst Larry Biegelsen has trimmed the price target in reaction to $144 from $151 to imply a premium of ~12.7% to the last close. In addition to a lower likelihood of success, Biegelsen predicts U.S. approval being “pushed out by at least a year” and narrative for pipeline losing “some luster.”
Piper Sandler analyst Matt O’Brien, with an overweight rating, expects that Medtronic (NYSE:MDT) shares “could be a bit volatile over the next couple of weeks as investors adjust their RDN models.”
Meanwhile, arguing that the readout appeared to be a bigger-than-expected binary event with the recent weakness in shares, JPMorgan analyst Robbie Marcus urges investors to buy the stock if it falls more than 4% – 5%.