Cigna earnings beat by $0.04, revenue topped estimates
On Wednesday, Wells Fargo maintained its Overweight rating on Medtronic , Inc. (NYSE: MDT) and slightly increased the price target to $106.00 from $105.00. The firm's decision followed Medtronic's robust first-quarter revenue performance, which surpassed expectations.
Medtronic reported first-quarter 2025 revenue of $8.0 billion, a 5.3% organic increase, outperforming the consensus estimate of $7.9 billion and Wells Fargo's projection of $7.88 billion. The company also exceeded its own guidance of a 4.0-4.5% increase. Earnings per share (EPS) for the quarter reached $1.23, topping both the consensus estimate of $1.20 and Wells Fargo's estimate.
The financial performance was attributed to stronger-than-anticipated revenue across several of Medtronic's divisions, including Cardiovascular Group (CVG), Neuroscience, and Diabetes. However, this was partially offset by a slightly lower operating margin of 24.4%, compared to Wells Fargo's estimate of 24.5%.
In light of these results, Wells Fargo has revised its forecasts for Medtronic. The firm increased its full-year 2025 revenue estimate to $33.6 billion from $33.4 billion and raised its EPS estimate for the same period to $5.46 from $5.44. The new price target of $106 is based on approximately 18 times Wells Fargo's calendar year 2025 estimated EPS of $5.87.
In other recent news, Medtronic Inc (NYSE:MDT). reported a 5.3% increase in revenue for the first quarter of fiscal 2025, with an adjusted earnings per share (EPS) growth of 3% on a reported basis and an 8% rise on a constant currency basis. The company's highest-grossing businesses saw an 8% growth, leading to a raise in full-year revenue and EPS guidance. Medtronic expects an organic revenue growth between 4.5% and 5% for fiscal year 2025. Amidst this financial growth, the company announced a global partnership with Abbott and appointed Gary Corona as the Interim CFO.
Wolfe Research maintained its Underperform rating on Medtronic, with a steady price target of $82.00. The firm's stance reflects a cautious outlook on the company's financial performance, citing a comparison to broader market expectations and Medtronic's historical growth rates.
Deutsche Bank also maintained its Hold rating on Medtronic, with a consistent price target of $85.00. The firm's analysis noted that despite Medtronic's recent financial achievements, the updated guidance was roughly equivalent to the first quarter's earnings beat, suggesting that the EPS estimates for 2026 may not see a significant upward revision.
InvestingPro Insights
As Wells Fargo gives Medtronic (NYSE: MDT) a vote of confidence with an updated price target, InvestingPro data and tips provide additional context for investors considering the stock. Medtronic's management has demonstrated a commitment to shareholder value through consistent share buybacks and a remarkable track record of raising its dividend for 10 consecutive years, with the company maintaining dividend payments for 48 consecutive years. This aligns with the firm's solid financial performance, showcasing a gross profit margin of 65.73% over the last twelve months as of Q4 2024, reflecting efficient operations and strong pricing power.
With a market capitalization of $109.51 billion and a forward-looking P/E ratio of 22.94, Medtronic is positioned as a prominent player in the Healthcare Equipment & Supplies industry. Its financial health is underlined by the fact that its cash flows can sufficiently cover interest payments, a reassuring sign for investors looking for stability. Additionally, the stock has been trading near its 52-week high, with a price that is 95.74% of this peak, indicating market optimism around the company's prospects.
For investors seeking more comprehensive analysis, there are 9 additional InvestingPro Tips available that offer deeper insights into Medtronic's performance and outlook. These tips can be accessed by visiting the dedicated page for Medtronic on InvestingPro, which includes further valuable metrics and expert commentary to inform investment decisions.
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