Medtronic plc MDT is steadily expanding its global footprint within the Cardiovascular business, which should support its growth in the coming quarters. Within Neuroscience, the company is gaining shares in Cranial and Spinal technologies, backed by strong growth and competitor exit. Robust international expansion also remains encouraging for the stock. Meanwhile, ongoing macroeconomic volatilities, along with escalating expenses, may have an adverse impact on the company’s operations.
In the past year, this Zacks Rank #3 (Hold) stock has risen 0.5% compared with the industry’s 6.8% growth and the S&P 500 composite’s 11.2% increase.
The renowned medical device company has a market capitalization of $108.05 billion. Medtronic has an earnings yield of 6.92% compared to the industry’s yield of 0.05%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 1.75%.
Let’s delve deeper.
Tailwinds for MDT
Market Share Gain in Cardiovascular to Continue: In Cardiovascular, cardiac rhythm management, one of Medtronic’s largest businesses, continued to build on the company’s category leadership, banking on strong performances of Defibrillation Solutions and cardiac pacing therapies. The company’s next-generation Micra AV2 and VR2 leadless pacemakers are particularly driving growth as they successfully enter new geographies and expand penetration in existing markets. Further, ICDs (Implantable cardioverter-defibrillator) are gaining market share following the FDA’s nod and CE Mark for the Aurora Extravascular ICD.
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In the fiscal third quarter of 2025, Medtronic’s cardiovascular portfolio grew in the mid-single digits, with the Cardiac Ablation Solutions business delivering 22% growth. This was fueled by increasing demand for the company’s Pulse Field Ablation platforms — Affera and PulseSelect. This dual-platform approach is driving revenue growth as Medtronic replaces competitor products and expands its global footprint.
Neurosurgery Portfolio Shows Strong Growth Prospects: Within Medtronic’s Neuroscience portfolio, the Cranial and Spinal technologies business has been registering strong growth in recent quarters. The company continues to gain market share as competitors struggle to keep pace, with one major player recently exiting the spine market. Medtronic’s AI-powered preoperative planning, imaging, robotics, navigation and powered surgical instruments are gaining significant advancements in this niche. The expanding partnership with Siemens Healthineers strengthens the company’s position in pre- and post-op imaging.
In Neuromodulation, MDT is gaining new implant share in both pain Stim and DBS (Deep Brain Stimulation). The company’s closed-loop sensing technology is reshaping both pain and brain stimulation treatments. The Inceptiv spinal cord stimulator, with its adaptive neural response and industry-leading MRI access, drove 12% growth in the fiscal third quarter within Pain Stim. In brain modulation, the 15% global growth and the 26% growth in the United States were fueled by strong Percept DBS adoption.
International Expansion Robust: In the third quarter of fiscal 2025, Medtronic generated nearly 49% of its revenues internationally. The company is particularly witnessing broad-based growth worldwide. The company is now more focused on expansion in emerging markets to address the massive, unmet and untapped demand for advanced medical technologies. In the reported quarter, emerging markets grew in high-single digits, including high-teens growth in India, mid-teens growth in Eastern Europe and low-double-digit growth in Southeast Asia, the Middle East and Africa.
Among recent developments, the Simplera Sync sensor is gaining strong acceptance in international markets. For the Hugo surgical robot, the company is scaling manufacturing production, expanding regulatory approvals and ramping up installations to see continued progress internationally.
Downsides for MDT
Macroeconomic Issues Hamper Market Growth: Medtronic noted that, in several of its markets, the company is experiencing supply-related disruptions. With regard to procedural volumes, in addition to an incremental China VBP, the company is still seeing lower volumes in elective coronary PCI, GI procedures, TAVR, spinal cord stim and some less emergent surgical procedures. The slower-than-anticipated recovery in procedural volumes primarily occurred in developed markets as healthcare systems continue to work through staffing and other challenges.
Escalating Expenses Weigh on Margins: Medtronic is currently affected by the industry-wide increase in costs and expenses stemming from geopolitical concerns. Although inflation has stabilized a bit, it is still higher than the historical trend. The continued increase in raw material and labor costs, as well as the oil price volatility, is denting the company’s profit. Further, a high interest rate leading to increasing borrowing costs is concerning.
MDT Stock Estimate Trend
The Zacks Consensus Estimate for Medtronic’s fiscal 2025 earnings per share (EPS) has remained constant at $5.46 in the past 30 days.
The consensus estimate for the company’s fiscal 2025 revenues is pegged at $33.48 billion, implying a 3.4% increase from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cardinal Health CAH.
Phibro Animal Health has an estimated long-term earnings growth rate of 26.2% compared with the industry’s 15.9%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 30.6%. Its shares have surged 32.6% compared with the industry’s 6.8% growth in the past year.
PAHC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific, carrying a Zacks Rank #2, has an earnings yield of 2.8% compared with the industry’s -0.4%. Shares of the company have rallied 40.6% compared with the industry’s 6.7% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.8%.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 11.8% for fiscal 2026 compared with the industry’s 9.8%. Shares of the company have rallied 54% against the industry’s 5% fall. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.3%.
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