Does the S&P 500 Rally Make MDT Stock a Buy Amid Easing Trade Tension?

The broader market rally, which pushed the benchmark to a two-week record high yesterday, fueled by tech giants like NVIDIA and Tesla, has provided a much-needed breather for investors. This has potentially set the stage for stocks like Medtronic MDT to gain momentum.

Over the past couple of months, Medtronic’s stock performance has remained sluggish, declining by 0.8%, reflecting the broader industry trend amid challenges such as aggressive tariff policies, trade tensions, and inflationary pressures. During this period, other major MedTech players, including Boston Scientific BSX and Abbott ABT, also showed muted performance, with Boston Scientific inching up 0.3% and Abbott slipping 0.6%. The broader industry and the S&P 500 index during this period registered a 2.6% and 5% decline, respectively.

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Also, from a technical perspective, MDT stock is currently trading below its 14-day and 50-day moving averages, signaling a bearish trend. This could deter momentum-driven investors and lead to short-term volatility in the stock price.

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The trade war and inflationary concerns have largely weighed on the MedTech sector these days, particularly for companies with significant global operations like Medtronic. However, NVIDIA NVDA gained over 3% and Tesla TSLA surged nearly 12% yesterday, driven by investor optimism that the upcoming set of tariff measures may not be as aggressive as previously feared. This shift in sentiment could ease worries about economic disruptions and inflationary pressures affecting Medtronic.

Medtronic is strategically expanding its global presence to address the unmet demand for advanced medical devices. Within Cardiovascular, Medtronic is gaining market share, banking on product launches in CRM and Structural Heart.

Meanwhile, Medtronic’s Hypertension business is on the brink of a major expansion, driven by its Simplicity blood pressure procedure. Within this business, CMS already finalized the inpatient payment as well as the outpatient transitional pass-through payment for the Symplicity Spyral renal denervation catheter, used in the Symplicity blood pressure procedure, under the Medicare Hospital Outpatient Prospective Payment System. This ensures that Medicare coverage will be available within the next eight months, paving the way for accelerated adoption.

In MedSurg, despite all distributor disruptions, Medtronic is scaling the production of Hugo RAS. The Neuroscience portfolios continue to contribute. Further, the company’s Pacing business continued to drive strong growth, banking Micra leadless pacemaker. Innovations and market expansion efforts are helping it offset the impact of inflation and supply disruptions. MDT’s strong liquidity position should allow it to meet its near-term debt obligations.