Industry Overview - The MedSurg equipment market is projected to grow at a compound annual growth rate (CAGR) of 9.54% from 2025 to 2030 [1] - The growth is driven by an aging population, rising chronic diseases, and rapid technological advancements [3] Boston Scientific (BSX) - Boston Scientific's MedSurg segment is gaining market share, particularly in Endoscopy, Urology, and Neuromodulation [4] - The Endoscopy segment is experiencing growth due to endoluminal surgery and single-use imaging [4] - Urology is benefiting from strong contributions from the Core Stone and prosthetic urology franchises [4] - Neuromodulation is boosted by new products like Cartesia leads and Lumina 3D programming algorithm [4] - The structural heart segment is also performing well, with a 24% growth in WATCHMAN sales [5] - Emerging markets are a vital growth engine, with net sales growing nearly 9.8% year-over-year [6] - In Q1, Boston Scientific reported an adjusted gross margin increase of 19 basis points and an operating margin improvement of 127 basis points [7] - The company raised its full-year 2025 outlook, projecting 15-17% reported net sales growth and adjusted EPS of $2.87-$2.94 [7] Medtronic (MDT) - Medtronic's MedSurg portfolio is benefiting from positive sales momentum in Surgical Robotics, particularly the Hugo robotic-assisted surgery system [8] - The Hugo RAS system has expanded its installed base to 30 countries, with growth in procedure volumes and utilization [8] - Medtronic is seeing significant growth in Cardiac Ablation Solutions, with nearly 30% growth in the fiscal fourth quarter [9] - The company is focused on expansion in emerging markets, which grew mid-single digits in the quarter [11] - Medtronic's operational performance in Q1 showed gross margin improvement of 19 basis points and operating margin growth of 210 basis points [12] - For fiscal 2026, Medtronic projects organic revenue growth of 5% over fiscal 2025 [12] Stock Performance - Over the past year, Boston Scientific's shares have risen by 35.2%, while Medtronic's shares have gained only 7.4% [13] - Boston Scientific is trading at a forward five-year price-to-sales (P/S) ratio of 7.5X, compared to Medtronic's 3.1X [15] - The Zacks Consensus Estimate for Boston Scientific's 2025 EPS implies a year-over-year improvement of 15.9% [17] - Analysts have shown declining confidence in Medtronic, with downward EPS estimate revisions in the last 60 days [18] Investment Outlook - Boston Scientific is gaining strength across MedSurg and structural heart segments, supported by innovation and global expansion [19] - Despite expected tariff impacts, Boston Scientific's raised guidance reflects confidence in sustained growth [19] - Medtronic, while carrying a Zacks Rank 4 (Sell), may attract value-focused investors due to its discounted P/S ratio [20]

Core Insights - Medtronic has appointed Dr. Joon Lee as a new independent board member, effective June 18, 2025, bringing valuable insights from his experience in healthcare management and innovation [1][7]. Company Overview - Medtronic, founded in 1949 and headquartered in Minneapolis, Minnesota, is a leading global medical technology company with over 95,000 employees [8]. - The company focuses on providing lifelong treatment solutions for chronic disease patients, impacting two patients every second globally with its medical technologies [8]. Dr. Joon Lee's Background - Dr. Lee is currently the CEO of Emory Healthcare, Georgia's largest academic medical system, with an annual revenue of approximately $5.6 billion [4]. - He has extensive experience in healthcare policy, hospital operations, and patient-provider relationships, having served in various leadership roles for over 25 years at UPMC [5][6]. - Dr. Lee has a strong focus on digital transformation in healthcare and has successfully enhanced public health response capabilities during the COVID-19 pandemic [6]. Significance of Dr. Lee's Appointment - Dr. Lee's perspective as a healthcare service provider will help Medtronic better understand hospital purchasing decisions, clinical needs, and patient experiences [7]. - His expertise is expected to drive the adoption of Medtronic's products, particularly in cardiovascular and neuroscience sectors [7]. Recent Developments - Medtronic announced plans to spin off its diabetes business, including the MiniMed insulin pump, into a standalone public company by November 2026 [12]. - The company is investing in the Hugo robotic-assisted surgery system and pulse field ablation technology for atrial fibrillation treatment [12]. - Medtronic is expanding globally, with a $50 million investment to establish a diabetes Global Capability Center in Pune, India, creating 600 jobs [12].

Core Insights - Medtronic plc has appointed Dr. Joon Lee, CEO of Emory Healthcare, as an independent director on its Board, effective June 18, 2025 [1] - Dr. Lee will contribute to the Science and Technology Committee and Compensation and Talent Committee [1] Company Overview - Medtronic is a global leader in healthcare technology, headquartered in Galway, Ireland, with a mission to alleviate pain, restore health, and extend life [6] - The company employs over 95,000 people across more than 150 countries and addresses 70 health conditions with its technologies [6] Dr. Joon Lee's Background - Dr. Lee has over 25 years of experience at the University of Pittsburgh Medical Center (UPMC), where he held significant roles including Executive Vice President and President of Physician Services [3] - He has a strong background in cardiology, having served as Chief of the Division of Cardiology and founding executive director of the UPMC Heart and Vascular Institute [4] - Dr. Lee's educational credentials include a BA from Dartmouth College and an MD from Duke University, along with extensive training in cardiology at Massachusetts General Hospital [5] Financial and Operational Insights - Emory Healthcare, under Dr. Lee's leadership, generates $7.7 billion in annual revenue and operates 12 hospitals with over 29,000 employees [2] - Dr. Lee also served as Chief Medical Officer of UPMC Insurance Services, which is a $13 billion health insurance division [4] Strategic Vision - Dr. Lee is recognized for his commitment to leveraging data and technology to enhance patient and provider experiences, aligning with Medtronic's mission [2]

Company Overview - Medtronic shares have increased by approximately 6% over the past month, outperforming the S&P 500 index [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Estimates for Medtronic have trended downward, with a consensus estimate shift of -6.38% in the past month [2] - The overall direction of estimate revisions indicates a negative outlook for the stock [4] VGM Scores - Medtronic has a Growth Score of B, a Momentum Score of F, and a Value Score of C, resulting in an aggregate VGM Score of C [3] Market Outlook - The downward trend in estimates has led to a Zacks Rank of 4 (Sell) for Medtronic, suggesting expectations of below-average returns in the coming months [4] Industry Comparison - Medtronic is part of the Zacks Medical - Products industry, where Phibro Animal Health (PAHC) has gained 4.1% over the past month [5] - Phibro reported revenues of $347.8 million for the last quarter, reflecting a year-over-year increase of +32.1% [5] - Phibro's expected earnings for the current quarter are $0.52 per share, indicating a +26.8% change from the previous year, with a Zacks Rank of 1 (Strong Buy) [6]

Company Overview - Medtronic serves over 95,000 patients and operates in more than 150 countries, with a research and development spend of $2.7 billion[18]. - The company has over 95,000 full-time employees, with 44% based in the U.S. or Puerto Rico[39]. - The company's principal executive office is located in Ireland, while its main operational offices are in Minneapolis, Minnesota[167]. Innovation and Product Development - The company aims to accelerate innovation-driven growth through recent product launches and a robust pipeline, targeting strong revenue growth in attractive end markets[20]. - Medtronic's diverse product offerings across multiple portfolios position it well for future market expansion and innovation[19]. - The company is committed to maintaining technological leadership through extensive R&D efforts, participating in hundreds of clinical trials each fiscal year[51]. - The company emphasizes the integration of data, AI, and automation to improve patient care and operational efficiency[20]. - The company continues to support patients with HVAD devices despite halting the distribution of the HVAD System in June 2021[22]. Financial Performance - For fiscal year 2025, the company reported net income attributable to Medtronic of $4,662 million, with diluted EPS of $3.61 and an effective tax rate of 16.6%[191]. - Non-GAAP net income for fiscal year 2025 was $7,079 million, with diluted EPS of $5.49 and a non-GAAP effective tax rate of 16.7%[191]. - Free cash flow for fiscal year 2025 was $5,185 million, compared to $5,200 million in fiscal year 2024[194]. - Total net sales for fiscal year 2025 increased by 4% to $33,537 million, driven by growth in several segments including Cardiac Rhythm & Heart Failure and Diabetes[199]. Market Segments - Medtronic's Cardiovascular Portfolio includes advanced products such as implantable cardiac pacemakers and defibrillators, contributing significantly to its revenue streams[21][22]. - The Structural Heart & Aortic division offers therapies for heart valve disorders and aortic disease, enhancing the company's treatment capabilities[23]. - The Neuroscience Portfolio includes products for spinal and cranial technologies, addressing a wide range of neurological conditions[25]. - Medtronic's Medical Surgical Portfolio focuses on advanced surgical products and therapies, catering to healthcare systems and alternate site providers[32]. Regulatory Environment - The global regulatory environment is increasingly stringent, impacting the cost and time needed for product approvals[67]. - The EU Medical Device Regulation (EU MDR) became effective on May 26, 2021, with an extended implementation period for high-risk devices until the end of 2027[66]. - Compliance with evolving data privacy and cybersecurity regulations has resulted in increased costs and compliance challenges[70]. - Regulatory compliance is complex and any adverse actions from agencies like the U.S. FDA could materially affect the company's operations and market position[99]. Competition and Market Challenges - The company faces competition from both large manufacturers and small companies, as well as pharmaceutical companies producing alternative therapies[58]. - The healthcare industry consolidation and the rise of ambulatory surgery centers (ASCs) could lead to increased competition and downward pricing pressure on the company's products[156][158]. - Cost-containment measures in the healthcare industry may result in reduced sales of medical devices, as third-party payors may deny payment approvals for procedures involving the company's products[159]. Supply Chain and Operational Risks - Supply chain disruptions, particularly for components like semiconductors, have previously affected manufacturing operations[86]. - The company faces risks related to supply chain disruptions, including reliance on petroleum-based materials, which can significantly affect manufacturing costs and sales[88]. - The company has plans in place to ensure continuity of supply for components and raw materials, despite potential regulatory challenges[62]. Corporate Social Responsibility - The company has a strong commitment to patient-centered solutions, enhancing experiences for both patients and healthcare providers[20]. - The Medtronic Employee Emergency Assistance Fund has provided $4 million in grants over the last five years to employees facing financial hardships due to unexpected events[49]. - The company achieved 100% pay equity for gender and ethnically diverse employees in the U.S. and 99% globally for gender[43]. Future Outlook - The company announced plans to separate its Diabetes business, aiming to create a new independent, publicly traded company within 18 months of the announcement[38]. - The company intends to expand operations in emerging markets, which could expose it to additional risks and costs[149]. - Continued global adoption of the TYRX Envelope for implantable devices is expected to drive future growth in Cardiovascular[207].

Group 1 - Medtronic is a large cap medical devices manufacturer and distributor that has performed well year-to-date in 2025, with shares outperforming both the S&P 500 and industry peers such as Stryker [1] - The focus of the analysis is on identifying high-quality companies with strong balance sheets and shareholder-friendly policies, utilizing a disciplined approach to valuation [1] Group 2 - The article does not provide any specific financial metrics or performance data for Medtronic or its competitors [1]

Group 1: Johnson & Johnson Overview - Johnson & Johnson operates primarily in pharmaceuticals and medical devices after spinning off its consumer-products operations, maintaining a strong position in both sectors [3] - The company is recognized as a Dividend King, having increased its dividend for 63 consecutive years, indicating a robust business model [4] - Johnson & Johnson is currently facing a significant class-action lawsuit related to contaminated talcum powder, which poses a substantial risk and uncertainty for investors [5][6] Group 2: Medtronic Overview - Medtronic is one of the largest medical device manufacturers globally and competes directly with Johnson & Johnson in the medical device sector [9] - The company has increased its dividend for 48 consecutive years, showcasing a strong business foundation comparable to Johnson & Johnson [9] - Medtronic is not currently embroiled in high-profile lawsuits, which positions it more favorably compared to Johnson & Johnson [12] Group 3: Investment Considerations - Both Johnson & Johnson and Medtronic offer similar dividend yields of approximately 3.3%, suggesting attractive pricing for dividend-focused investors [10] - Medtronic is undergoing a business revamp to focus on more profitable product lines and is expected to spin off its diabetes division, which could enhance profitability [12][13] - The downside risk for Medtronic is primarily related to the potential delays in its growth-driven revamp, but the company maintains transparency with its investors [16]

Core Insights - Medtronic has appointed Kate Benedict as the Senior Vice President and President of the Acute Care & Monitoring (ACM) division, which is part of its Medical Surgical Portfolio, effective June 10, 2025. Her extensive experience in the medical industry is expected to drive innovation and growth in this newly formed division [6][15]. Company Developments - Medtronic has undergone significant personnel changes in recent years, including the departure of key executives and the restructuring of its business units. The company announced in February 2024 that it would exit the unprofitable ventilator product line and merge its remaining patient monitoring and respiratory intervention businesses into the new ACM division [7][8]. - The ACM division is positioned to capitalize on a $100 billion market potential, focusing on hospital and home monitoring, particularly in chronic disease management and post-operative care [11][15]. Market Context - The demand for ventilators has sharply declined following the stabilization of the COVID-19 pandemic, leading to decreased profitability in this product line. Medtronic's strategic shift aims to focus on high-growth monitoring technologies [11][8]. - The ACM division's product offerings include pulse oximeters, remote patient monitoring, airway management, and respiratory monitoring products, which are essential for acute care, post-operative recovery, and chronic disease management [13][17]. Future Outlook - The appointment of Kate Benedict comes at a crucial time as the ACM division seeks new growth opportunities. Her cross-industry experience is anticipated to enhance the market expansion of products like HealthCast™ and Argos™ [11][15]. - Medtronic's revenue for the fiscal year 2024 was reported at $32.4 billion, with the Medical Surgical Portfolio, including ACM, accounting for approximately 26% of this total [11].

Core Insights - Medtronic plc announced the name "MiniMed" for its planned new Diabetes Company, honoring its legacy and 40-year history in diabetes care [1] - The company aims to enhance diabetes management through innovative technology, making it more predictable and less burdensome for patients [1][2] - The separation of the Diabetes business is targeted for completion within 18 months, subject to legal and customary conditions [3] Company Overview - Medtronic is a global leader in healthcare technology, focusing on transforming diabetes care [1] - The Diabetes business employs over 8,000 individuals dedicated to innovation and improving health outcomes for diabetes patients [2] Historical Context - MiniMed was originally founded in 1983 by Alfred E. Mann, introducing groundbreaking innovations in diabetes care [1] - The name change reflects the company's commitment to its roots and the trust built over decades [1] Future Plans - The separation will involve capital markets transactions, potentially including a spin-off or split-off of the remaining shareholding in MiniMed [5] - The company is committed to fulfilling its mission of making diabetes management more stable and predictable [1][2]

Core Viewpoint - Medtronic presents a long-term investment opportunity despite recent stock performance challenges, with several factors supporting its potential for recovery and growth. Group 1: Business Overview - Medtronic has a market capitalization of approximately $110 billion and holds leading positions across various healthcare sectors, including cardiovascular products, neuroscience, medical surgery, and diabetes [2] - The company's global presence allows it to launch products in international markets while awaiting U.S. approvals, creating built-up demand upon U.S. market entry [4] Group 2: Dividend and Financial Metrics - Medtronic has a strong history of increasing dividends, having raised its dividend for 48 consecutive years, nearing Dividend King status [6] - The current dividend yield stands at 3.25%, significantly higher than the S&P 500's yield of 1.3% and the average healthcare stock yield of approximately 1.8%, indicating that the stock is historically cheap [8][9] - Traditional valuation metrics such as price-to-sales, price-to-earnings, and price-to-book ratios are currently below their five-year averages, suggesting an attractive pricing opportunity [10][11] Group 3: Growth Strategy - Medtronic is actively working to restore growth by focusing on research and development, introducing new products, and improving profit margins through the exit of less profitable business lines, particularly the spin-off of its diabetes division [14][15] - The management believes that the spin-off will be immediately accretive to earnings, as the diabetes division, despite its rapid growth, has lower margins compared to other segments [15]