Medtronic stock gains as CMS proposes coverage for renal denervation

Investing.com - Medtronic , Inc. (NYSE:MDT) stock gained after the Centers for Medicare and Medicaid Services (CMS) released a proposed Decision Memo on Thursday, July 10th, to cover Renal Denervation (RDN) procedures under specific coverage criteria. The healthcare giant, currently valued at $115 billion, has seen its stock climb 18% over the past year and is trading near its 52-week high. According to InvestingPro, the company maintains a "GOOD" overall financial health score.

The CMS proposal would cover both radiofrequency-based RDN, which Medtronic offers, and ultrasound-based RDN from Recor Medical (TASE:BLWV), a subsidiary of Otsuka Medical Devices. A final decision is expected before October 8, 2025, which could serve as a catalyst for Medicare and Medicaid patient adoption.

Goldman Sachs maintained its Sell rating and $78.00 price target on Medtronic despite acknowledging the development as "objectively positive" for RDN adoption. The firm noted that patient workflow requirements in the proposal suggest revenue contribution may progress at a gradual pace.

Goldman Sachs estimates RDN could contribute approximately $250-300 million to Medtronic’s revenue through fiscal year 2029, helping to transform the company’s Coronary and Peripheral Vascular division from low-single-digit declines to mid-single-digit growth.

Current Wall Street estimates reflect similar expectations, projecting an acceleration to approximately 4-5% organic growth for Medtronic’s U.S. Coronary and Peripheral Vascular business moving forward.

In other recent news, Medtronic, Inc. has received a proposed National Coverage Determination (NCD) from the Centers for Medicare & Medicaid Services (CMS) for its Renal Denervation (RDN) therapy. This proposal is seen as favorable for Medtronic, potentially opening up a significant market opportunity. The proposal outlines coverage for patients with uncontrolled hypertension, aligning with Medtronic’s clinical trial parameters. Analysts at BofA Securities maintained a Buy rating on Medtronic, noting that CMS’s proposal could contribute $100-150 million in annual revenue growth. Meanwhile, William Blair reiterated a Market Perform rating, emphasizing the potential market worth tens of billions of dollars for Medtronic’s RDN technology. JPMorgan also maintained a Neutral rating, highlighting the regulatory milestone this represents for Medtronic. The final coverage decision is expected by October 8, 2025, which could further enhance Medtronic’s market position. BTIG analysts noted that the proposal could initially limit uptake due to specific facility requirements. Overall, these developments mark a significant step for Medtronic’s RDN therapy.

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