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Medtronic Hires JPMorgan Analyst, and Investors Rate It a ‘Buy’

Updated on
  • Shares of medical device company rise most in six months
  • ‘Vast majority’ of Weinstein’s compensation will be in stock

For about 20 years at JPMorgan Chase & Co., Mike Weinstein covered Medtronic Plc as an analyst, raising his target price on the stock from $42 to $90. Now he’s joining the medical device company as an executive focused on deals -- and boosting the share price.

Weinstein, 47, will start immediately as a senior vice president of strategy, reporting to Chief Financial Officer Karen Parkhill, Medtronic said in a statement Monday.

The company has trailed rivals, grappling with natural disasters including hurricanes and wildfires, and man-made issues such as a shortfall in production of its hottest diabetes devices.

“There is a sense of urgency in my mind of creating shareholder value, and I think Mike’s perspective will help us with some new insight,” Medtronic Chief Executive Officer Omar Ishrak said in a conference call Monday.

Weinstein declined to comment in detail on his plans, including what Medtronic should do with the $14.4 billion in cash and short-term investments it is holding. He said he will be more forthcoming at the company’s annual investor day next month in New York.

The company trades at a meaningful discount to peers, said Vijay Kumar, an analyst at Evercore ISI, making the company’s statement about shareholder value “an interesting choice of words.”

Stock Compensation

Weinstein said he’s taking the “vast majority” of his compensation in the company’s stock.

“That was at my insistence,” Weinstein said. “It’s because of the opportunity that I see in front of this company and my conviction in management’s ability to execute on that strategy.”

So far, it’s paying off. Medtronic was up as much as 4.2 percent to $84.48 in New York, the biggest intraday gain in almost six months.

Medtronic’s biggest recent purchase is the 2015 purchase of Covidien for about $43 billion, using the transaction to move its legal address to Dublin. Kumar said that while Weinstein will be responsible for looking for deals, he doesn’t think that investors are looking for large acquisitions from the company.

Weinstein didn’t take much time off between his decades at JPMorgan and the move to Medtronic. When he announced in late March that he was leaving the bank, he said he planned to stay on through the end of April and then take some time off.

“I’m not one to go gentle into the good night; so we’ll see how long the retirement lasts and how quickly I drive Alison and the kids crazy,” he said in an email announcing his departure.

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