MDT Earnings Beats Estimates for May 24
Medtronic PLC (MDT) just reported earnings on May 24, 2018, before the market opened. Earnings Per Share (EPS) was reported at $1.42, after analysts had expected $1.39 per share. As a result, MDT opened up +1.3%, and closed for the day up +2.3% at 87.13.
Price Volatility Against Expectations
Ahead of earnings, option traders were expecting a ± 3.1% move for this date, so the earnings move of +2.3%represents an undersized move against the market. MDT has only experienced 3 larger-than-expected earnings moves in the last 12 quarters.
Earnings Price Patterns
1 Day After Earnings:For each of the last 5 quarters, MDT stock price has gone down on the day following earnings. It has had an average loss of -1.1% during that span.
3 Days After Earnings:For each of the last 4 quarters, the stock price has gone down in the 3 days following earnings. Over that period, it has an average loss of -2.0%.
Earnings Option Strategies
MarketChameleon's option strategy analysis
shows that selling out-of-the-money puts one day after earnings and buying them back one week after earnings had 82%
winning occurrences, for an average gain of +27.4%
. Additionally, selling at-the-money straddles resulted in 64%
winning occurrences, for an average return of +4.0%
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