MEI Stock Loses a Large Chunk of Value; Medtech May Come Handy

Recent news surrounding the United States debt ceiling had left everyone standing in an awe. Sectors of the economy felt the ripples as the U.S. market suffered due to negative investor sentiment. Methode Electronics (NYSE: MEI), a multinational company, saw a massive blow in its share value. MEI stock price closed with an over 18% decline in a day, placing it among the top losers in yesterday’s market.

Market Headwinds May Slow Down the Company Progress

However, the major cause of decline in MEI stock remained the company’s reduced earnings per share outlook (EPS) from $2.5 – $2.6 to $2.1 – $2.14. According to a press release, Methode Electronics are expecting $1.183 Billion in revenue for the fiscal year 2023.

Company CEO Donald W. Duda believes market headwinds in segments including electric bikes, commercial vehicles, data centers and more might be adverse. The press release reveals that higher professional fees, tax expenses, lower margin sales had a significant impact on the organization.

Methode Electronics will release their next earnings report on June 22, 2023. Their business is managed on a segment basis with focus on sectors including medical, industrial, automotive and more. While MEI stock has already witnessed the effects of the earnings date announcement, it may experience further decline if panic sellers remain active in the coming days.

MEI Stock Price Analysis

MEI stock has witnessed a gradual rise as depicted by the parallel channel. The price created a double bottom pattern with the value bouncing off the $33 – $34 support levels in July and October 2022. A falling wedge pattern is visible during February 2023 with the share value breaking above $49. MEI shares were changing hands at $36.9 at publication time.

The latest plunge could ring alarm bells for MEI stock. The large gap between the candles is an uphill battle for the company. Following the decline, aroon down dominated aroon up straight away. Elder force index (EFI) has taken a nosedive, further highlighting negative momentum. Although the indicator appears in sync with the momentum, it shows a minor divergence during the beginning of March 2023.

Automotive market may have a significant impact on MEI share price this year. According to a report issued by UBS Group AG, an American multinational investment bank, global car production may exceed 6%. Over supply may lead to declining prices to sell the access lots noted Yahoo Finance, a financial news provider.

Rising energy costs and high prices may impact the electric vehicle (EV) sector as it could make it less competitive against its traditional gas-based automotive industry. However, the medtech market might be a savior for Methode Electronics. Technologies including blockchain and virtual reality (VR) are helping healthcare professionals to enhance their capabilities and productivity.

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.