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On Friday, Needham analysts maintained a Hold rating on Medtronic , Inc. stock (NYSE: NYSE:MDT), a $111.5 billion healthcare equipment giant. The decision follows the company’s announcement during its fiscal fourth-quarter 2025 results of plans to spin off its Diabetes business into a separate public entity. The Diabetes division accounts for approximately 8% of Medtronic’s total revenue of $33.5 billion.
The analysts believe the separation could be beneficial for both Medtronic and its Diabetes business. They conducted a sum-of-parts analysis, evaluating Medtronic without the Diabetes segment and the Diabetes business as independent entities. In their base case scenario, they estimate the combined value of the two companies to be around $93 per current Medtronic share. According to InvestingPro analysis, Medtronic’s current trading price is near its Fair Value, with analyst targets ranging from $78 to $112.45.
This valuation is slightly above Medtronic’s present share price. The analysts suggest that while the separation might not immediately unlock significant value, it has the potential to enhance shareholder value in the long term.
Medtronic’s strategic move is seen as a step towards optimizing its business structure. The company’s decision is part of its broader efforts to focus on core operations and improve overall performance.
The separation plan is expected to proceed, with further details likely to be shared as Medtronic moves forward with its strategy.
In other recent news, Boston Scientific (NYSE:BSX) has decided to halt worldwide sales of its ACURATE neo2 and ACURATE Prime products. This decision follows discussions with regulatory bodies about increased clinical and regulatory requirements. Despite this change, the company remains optimistic about meeting its second-quarter and full-year 2025 sales and adjusted earnings per share guidance. Evercore ISI has maintained its Outperform rating for Boston Scientific, indicating confidence in the company’s future performance.
Meanwhile, Medtronic has announced plans to separate its Diabetes business within the next 18 months, a move expected to enhance its earnings growth. This strategic decision has led Truist Securities to raise its price target for Medtronic to $92, while maintaining a Hold rating. RBC Capital Markets also adjusted its price target for Medtronic to $101, retaining an Outperform rating, following a 1% revenue and 3% EPS beat in the fourth quarter of fiscal year 2025.
Stifel analysts have maintained a Hold rating on Medtronic with a price target of $87, noting the impact of tariffs on the company’s fiscal year 2026 outlook. Bernstein has kept an Outperform rating for Medtronic, with a $93 price target, citing consistent revenue growth and the potential benefits of the Diabetes business spin-off. These developments reflect ongoing strategic adjustments and market responses for both Boston Scientific and Medtronic.
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