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Medtronic Names Next CEO as Omar Ishrak to Step Down in 2020

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Shares of Medtronic plc. (MDT - Free Report) slipped a marginal 0.1% (to close at $107.89 on Aug 30) following the company’s retirement announcement of Omar Ishrak, its current chairman and CEO since 2011. This was a period that wrote the triumph of this MedTech stalwart in golden letters.

As planned, Ishrak has to step down from the CEO’s post on Apr 26, 2020 after the company exits its current fiscal year as by that time, he will attain the mandatory retirement age of 65 years.

This is a big news in itself as during Ishrak’s tenure, among a host of enormous achievements that he made, annual revenues of the company doubled and its market capitalization increased by more than $100 billion.

Per a Mass Device article, “Ishrak will be most widely remembered for the largest-ever medtech merger — the $50-billion buyout of Covidien in early 2015 — and the raft of other M&A moves that defined his time at Medtronic.” The Covidien acquisition is still the most gigantic one in the history of medical device industry.

The Successor to Omar

The market seems pretty positive about the board of directors’ decision regarding the successor to fill Ishrak’s shoes. Notably, Medtronic announced that Geoff Martha, the current executive vice president (EVP) of the company’s Restorative Therapies Group (RTG), will take over the reins effective Apr 27, 2020. Meanwhile, Nov 1 onward, Martha will assume the newly-created role as Medtronic’s president and also join its board members.

Like Ishrak, Martha’s feat was also significant for Medtronic as he headed the company’s path-breaking acquisition of Covidien. In July 2014, he was named the CEO for the integration of Covidien into Medtronic and later became the president of RTG in 2015. Prior to Medtronic, Martha spent 19 years handling a variety of business development, strategic marketing and sales management roles at GE Healthcare and GE Capital.

Meanwhile, Brett Wall, the present senior vice president and president of RTG’s Brain Therapies division, will be appointed as EVP and group president of RTG in November 2019. During his term, the Brain Therapies division generated double-digit annual growth and introduced devices like the Solitaire Revascularization for minimally invasive treatment in case of ischemic stroke.

Share Price Performance

Over the past year, shares of Medtronic have outperformed the industry. The stock has returned 14.4% compared with the industry's 2.8% rise.

Zacks Rank and Other Stocks Worth a Look

Medtronic currently has a Zacks Rank #2 (Buy). A few other top-ranked stocks in the broader medical space are AmerisourceBergen Corporation , Baxter (BAX - Free Report) and NuVasive , each carrying the same solid Zacks Rank as Medtronic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AmerisourceBergen’s long-term historical earnings growth rate is estimated at 14.3%.

Baxter’s long-term earnings growth rate is projected at 12.8%.

NuVasive’s long-term earnings growth rate is expected to be 12.75%.

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