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On Friday, JPMorgan analyst Robbie Marcus maintained a Neutral rating on Medtronic , Inc. (NYSE:MDT), a prominent $110.4 billion healthcare equipment company, with a consistent price target of $95.00. According to InvestingPro data, the company maintains a GOOD financial health score, with strong profitability metrics. Marcus provided insights ahead of the company’s fourth-quarter fiscal year 2025 earnings report, which is scheduled to be released before market open on May 21, 2025.
Marcus highlighted that Medtronic is entering a significant new product cycle, anticipating the formalization of a Renal Denervation (RDN) National Coverage Determination (NCD) and increased momentum for Affera as supply constraints ease. He projected that revenue guidance would likely be conservative, estimated around 4.5-5.5% in organic growth, which aligns with InvestingPro’s reported 4% revenue growth forecast and is supported by new product launches. The stock currently trades at a P/E ratio of 26.11x, which InvestingPro analysts note is high relative to near-term earnings growth potential.
However, Marcus expressed concern regarding Medtronic’s profit and loss outlook, noting potential pressures on earnings per share (EPS) for fiscal year 2026. These pressures are expected to arise from a full year of tariff headwinds, which is more significant than most of the MedTech industry, and a relatively greater exposure to the Chinese market. Consequently, he anticipates EPS growth to be in the range of 2-5%, as opposed to the market consensus of approximately 5%. This forecast also includes the need for increased research and development spending to support new product launches and future growth.
Marcus also pointed out that foreign exchange rates present a significant variable that could impact financial results. He anticipates that, along with a modest top- and bottom-line beat for the fourth quarter, stakeholders will be looking for Medtronic to set expectations that will allow for consistent revenue upside, sustainable operating margin leverage, and EPS beats—outcomes that have not been consistently seen across all three metrics in the past.
Investors will be watching closely as Medtronic prepares to share its fourth-quarter results and provides guidance that could influence the company’s stock performance on the New York Stock Exchange. The company maintains a strong dividend profile with a current yield of 3.25% and has increased dividends for 11 consecutive years. For deeper insights into Medtronic’s valuation and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which are available for over 1,400 US stocks.
In other recent news, Medtronic has submitted its Hugo robotic-assisted surgery system for FDA approval, marking a significant milestone as it seeks to expand its presence in the surgical field. This follows the successful results of the EXPAND URO trial, which met safety and efficacy benchmarks, enhancing Medtronic’s portfolio in the urology segment. Barclays (LON:BARC) reaffirmed its Overweight rating on Medtronic with a target price of $109, citing the Hugo program’s progress as a potential catalyst for the company. Additionally, Medtronic has filed two 510(k) applications with the FDA for its new interoperable insulin pump and SmartGuard algorithm, aiming to integrate with Abbott’s continuous glucose monitoring sensor.
In collaboration with Orchestra BioMed, Medtronic received FDA Breakthrough Device Designation for the atrioventricular interval modulation (AVIM) therapy, targeting patients with uncontrolled hypertension. This designation could expedite the regulatory process and potentially enhance reimbursement pathways. Piper Sandler maintained a neutral stance on Medtronic, with a $90 price target, following insights into renal denervation technology, which may see limited use due to its niche application. Meanwhile, Stifel analysts kept a Hold rating on Medtronic, setting a price target of $87, as they observed narrowing performance gaps between Medtronic’s TAVR technology and traditional surgery. These recent developments reflect Medtronic’s ongoing commitment to innovation and its strategic collaborations in advancing medical technology.
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