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Investing.com - Leerink Partners has reiterated an Outperform rating and $110.00 price target on Medtronic , Inc. (NYSE:MDT), a $118.65 billion medical device maker, following news of activist investor Elliott Management becoming one of its largest shareholders. The stock has shown strong momentum with an 18.08% gain year-to-date, according to InvestingPro data.
According to a Wall Street Journal report cited by Leerink, Medtronic is making changes to its board as discussions with Elliott Management have begun. The talks have reportedly remained friendly and focused on strategies to boost the company’s valuation and build plans centered on core assets. InvestingPro analysis shows the company maintains strong fundamentals with a 3.06% dividend yield and has raised its dividend for 11 consecutive years.
Leerink views these developments as "incrementally positive" for Medtronic, noting Elliott Management’s track record of unlocking shareholder value. The firm highlighted that Medtronic has been a "chronic underperformer" over the past five-plus years, trading at valuation levels below its historical averages and at a discount to many large-cap medical technology peers. Current metrics from InvestingPro show the stock trading at a P/E ratio of 25.63, with revenue growth of 3.62% in the last twelve months.
Despite past underperformance, Leerink believes Medtronic is already experiencing a positive "shifting tide" led by its PFA and RDN technologies, along with a revamped product portfolio. The firm sees additional opportunities for value creation on the horizon.
Leerink pointed to a similar situation between Elliott and Cardinal Health (NYSE:CAH) as a recent analog that "resulted in a major positive for the stock," suggesting this development could benefit Medtronic shareholders.
In other recent news, Medtronic reported first-quarter fiscal 2026 earnings that surpassed both Goldman Sachs estimates and consensus expectations. Despite this, Goldman Sachs maintained its Sell rating, citing slowed organic revenue growth. Mizuho (NYSE:MFG), however, kept an Outperform rating and highlighted Medtronic’s earnings beat by $195 million, with strong performances in the Cardiovascular, Diabetes, and MedSurg segments. Stifel reiterated a Hold rating, noting modest outperformance in organic growth and earnings per share, while Raymond (NSE:RYMD) James maintained a Market Perform rating, acknowledging a 2% revenue beat due to favorable foreign exchange rates. Additionally, Medtronic announced the appointment of two new independent directors, John Groetelaars and Bill Jellison, to its board. The company also formed special committees focused on growth and operations as part of its strategic initiatives. These developments come as the company continues to navigate its business landscape.
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