JPMorgan maintains a Neutral stance on Medtronic (MDT, Financial) following a proposal from the Centers for Medicare and Medicaid Services regarding national coverage for renal denervation. This proposal aims to encompass a wide range of patients with hypertension, which is seen as a promising opportunity for Medtronic. The final ruling, expected in October, could open a multi-billion dollar market for the company. However, JPMorgan highlights that Medtronic will face challenges in educating primary care physicians and cardiologists before fully capitalizing on this potential market. As a result, the firm anticipates a gradual path to realizing these gains.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for Medtronic PLC (MDT, Financial) is $95.95 with a high estimate of $112.45 and a low estimate of $78.00. The average target implies an upside of 4.62% from the current price of $91.71. More detailed estimate data can be found on the Medtronic PLC (MDT) Forecast page.
Based on the consensus recommendation from 35 brokerage firms, Medtronic PLC's (MDT, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Medtronic PLC (MDT, Financial) in one year is $97.80, suggesting a upside of 6.64% from the current price of $91.71. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Medtronic PLC (MDT) Summary page.
MDT Key Business Developments
Release Date: May 21, 2025
- Revenue: $8.9 billion, grew 5.4% organically.
- Adjusted EPS: $1.62, up 11%.
- Operating Margin: 27.8%, increased by 90 basis points.
- Gross Margin: 65.1%, down 70 basis points year-over-year.
- Cardiovascular Growth: 8% growth, with nearly 30% growth in Cardiac Ablation Solutions.
- Neuro-Modulation Growth: 10% growth.
- Diabetes Growth: 12% growth, sixth consecutive quarter of double-digit growth.
- US Revenue Growth: 5%, strongest quarterly US growth in 15 quarters.
- Adjusted Tax Rate: 16%.
- Dividend: Increased for the 48th consecutive year.
- Fiscal Year '26 Revenue Guidance: Approximately 5% organic growth.
- Fiscal Year '26 EPS Guidance: $5.50 to $5.60.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Medtronic PLC (MDT, Financial) reported a strong finish to the fiscal year with a 5.4% revenue growth, marking 2.5 years of mid-single-digit growth.
- The cardiovascular segment saw an 8% growth, driven by nearly 30% growth in Cardiac Ablation Solutions (CAS).
- The company achieved double-digit growth in neuro-modulation and diabetes, with high single-digit growth in cranial and spinal technologies in the US.
- Operational efficiency translated revenue growth into high single-digit operating profit and low double-digit EPS growth.
- Medtronic PLC (MDT) announced the separation of its Diabetes business, which is expected to enhance focus on high-margin growth markets and improve overall profitability.
Negative Points
- The company faces potential impacts from tariffs, with a forecasted net tariff impact to COGS in fiscal year '26 of approximately $200 million to $350 million.
- Despite strong revenue growth, the adjusted gross margin decreased by 70 basis points year-over-year due to mix from Diabetes and CAS as well as foreign exchange.
- The EPS guidance for fiscal year '26 is impacted by increased interest and tax expenses, resulting in a 300 basis points impact on EPS growth.
- The Diabetes business, despite its growth, has lower gross and operating margins compared to the overall company, affecting overall profitability.
- The ramp-up of new products like the Simplera sensor in the Diabetes segment is expected to initially pressure margins due to manufacturing costs.
