Why Is Medtronic (MDT) Down 2% Since Last Earnings Report?

Core Viewpoint - Medtronic's recent earnings report shows positive growth in earnings and revenues, but the stock has underperformed the S&P 500, raising questions about future performance leading up to the next earnings release [1][2]. Financial Performance - Medtronic reported Q2 fiscal 2026 adjusted earnings per share of $1.36, a 7.9% increase from the previous year, exceeding the Zacks Consensus Estimate by 3.82% [3]. - Total worldwide revenues for the quarter reached $8.96 billion, reflecting a 6.6% year-over-year increase and surpassing the Zacks Consensus Estimate by 1.11% [4]. Segmental Analysis - Cardiovascular segment revenues grew 9.3% organically to $3.44 billion, with Cardiac Rhythm & Heart Failure sales increasing 14.3% to $1.83 billion [5]. - Medical Surgical revenues totaled $2.17 billion, up 1.3% year over year, while Neuroscience revenues reached $2.56 billion, a 3.9% increase [6][7]. - Diabetes segment revenues rose 7.1% organically to $757 million [7]. Margin Performance - Gross margin expanded by 90 basis points to 65.8%, despite a 3.9% increase in the cost of products sold [8]. - Adjusted operating margin improved by 50 basis points year over year to 24.3% [8]. Fiscal Outlook - For fiscal 2026, Medtronic projects organic revenue growth of 5.5%, up from a previous estimate of approximately 5% [9]. - Full-year adjusted earnings per share are expected to be in the range of $5.62-$5.66, slightly revised from $5.60-$5.66 [10]. Estimate Trends - There has been a downward trend in estimates revisions over the past month, indicating a potential shift in investor sentiment [11][13]. VGM Scores - Medtronic currently holds a poor Growth Score of F, a Momentum Score of C, and a Value Score of B, resulting in an aggregate VGM Score of D [12].