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On Thursday, Stifel analysts maintained a Hold rating on Medtronic , Inc. (NYSE:MDT) shares with a steady price target of $87.00. The firm’s analysis followed Medtronic’s fourth-quarter earnings release from the $108 billion medical technology giant, which presented a mix of positive results and future concerns due to tariff pressures. With a robust gross profit margin of 66% and strong financial health score according to InvestingPro, Medtronic reported earnings that surpassed both Stifel and consensus estimates for revenue and earnings per share (EPS).
Medtronic’s fourth-quarter performance indicated a robust close to the fiscal year 2025, with revenue growth and EPS exceeding expectations. The company, which boasts a 49-year streak of consecutive dividend payments and currently offers a 3.3% dividend yield, provided an initial forecast for approximately 5% organic growth in fiscal year 2026, slightly higher than Stifel’s prediction of 4.5%. Despite these positive indicators, the analysts noted the upcoming fiscal year might be more transitional for Medtronic, with various factors to consider. InvestingPro analysis suggests the stock is currently trading below its Fair Value, with 8 additional key insights available to subscribers.
The company anticipates that tariffs will negatively impact the EPS outlook for fiscal 2026, projecting a cost of goods sold (COGS) headwind between $200 million and $350 million. This update has led Stifel to adjust their EPS projections downward for fiscal 2026, accounting for the expected tariff impacts. With a healthy current ratio of 1.9 and strong cash flows sufficient to cover interest payments, the firm pointed out that such MedTech tariff effects are now anticipated and acknowledged within the investment community.
The Stifel commentary highlighted the complexity of Medtronic’s recent earnings report, which included numerous points of analysis for investors. Despite the optimistic revenue growth forecast, the upcoming fiscal year could present challenges for the company as it navigates the effects of tariffs and other market factors.
In summary, while Medtronic’s recent financial results have shown strength, Stifel analysts have factored in the potential headwinds from tariffs into their outlook. The firm’s reiteration of the Hold rating and $87.00 price target reflects a cautious approach to Medtronic’s stock as it enters a year that may involve significant transitions and adjustments.
In other recent news, Medtronic, Inc. reported fiscal fourth-quarter earnings with revenue reaching $8.93 billion, marking a 5.4% year-over-year organic increase, surpassing the consensus estimate of $8.81 billion. The company also reported an EPS of $1.62, exceeding the forecast of $1.58, alongside improved operating margins. In addition to these earnings, Medtronic announced plans to spin off its Diabetes business, a move that has been positively received by analysts like Bernstein, who maintain an Outperform rating with a $93 price target. Evercore ISI also maintains an Outperform rating but adjusted its price target to $103, citing mixed outcomes in Medtronic’s recent quarterly performance.
Citi analysts have lowered their price target to $98 while maintaining a Buy rating, recognizing the company’s robust quarterly performance and future guidance. Meanwhile, JPMorgan reiterated a Neutral rating with a $95 target, expressing skepticism about the value creation from the Diabetes business spin-off. The separation strategy, involving an IPO and a tax-free split-off, has sparked discussions about its impact on Medtronic’s margins and growth prospects. Despite differing views on the spin-off, analysts generally acknowledge Medtronic’s strategic moves and earnings performance as significant developments.
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