Core Insights - Medtronic plc (MDT) is set to report its first-quarter fiscal 2026 results on August 19, with adjusted earnings in the last quarter exceeding estimates by 2.53% [1][2] - The Zacks Consensus Estimate for Q1 revenues is $8.37 billion, indicating a year-over-year growth of 5.7%, while earnings per share (EPS) is estimated at $1.23, flat compared to the previous year [2][12] - EPS estimates have declined by 6.8% over the past 90 days, reflecting challenges from rising costs and inflationary pressures [3][4] Financial Performance - Medtronic has consistently beaten earnings estimates in the last four quarters, with an average surprise of 2.21% [1] - The company’s adjusted gross margin decreased by 70 basis points year-over-year in Q4 fiscal 2025 due to foreign exchange impacts [9] - The company expects a 1-2% unfavorable impact on quarterly revenues from foreign exchange at recent rates [11] Business Segments and Growth Drivers - The separation of the Diabetes business, which accounted for about 8% of total revenue, may have affected quarterly performance [5][13] - Despite challenges, Medtronic has shown resilience with mid-single-digit organic revenue growth and strong performance in several segments, including pulse field ablation, TAVR, and neuromodulation [14][15] - The company is expected to report growth in its Neuromodulation segment, driven by closed-loop sensing technology [17] Market Position and Valuation - Medtronic's stock rose 9.3% in the fiscal first quarter, outperforming the industry and S&P 500 [25] - The company trades at a forward P/E ratio of 16.23, significantly below the industry average of 22.00 and the S&P 500's 21.19, indicating a potential undervaluation [26] - Medtronic's liquidity position is strong, with cash and cash equivalents of $8.97 billion against total debt of $28.5 billion [22][23] Strategic Outlook - The company is focusing on foundational changes, including improving global operations and investing in fast-growth MedTech markets [19][20] - Medtronic's highest growth opportunities are in markets growing faster than the overall company, particularly in Cardiac Ablation [21] - The ongoing transformation and exposure to strong secular growth markets position Medtronic for long-term growth despite macroeconomic headwinds [29]

Core Viewpoint - Medtronic is facing challenges in the fiscal fourth quarter of 2025 due to rising costs, geopolitical pressures, and declining earnings estimates despite previous earnings beats [3][4][6]. Financial Performance - Medtronic's adjusted earnings for the last reported quarter were $1.39, exceeding the Zacks Consensus Estimate by 2.21% [1] - The Zacks Consensus Estimate for fiscal fourth-quarter revenues is $8.81 billion, indicating a year-over-year growth of 2.6% [2] - The consensus estimate for fourth-quarter earnings is $1.58 per share, reflecting an 8.2% rise year-over-year [2] - Earnings estimates for the fourth quarter have declined by 1.9% over the past 90 days [2] Challenges and Headwinds - Rising costs and expenses due to inflation and geopolitical pressures are impacting profitability [3] - The tariff environment is affecting financial outlook, particularly due to Medtronic's manufacturing presence in Mexico and Canada [4] - Lower procedural volumes in elective surgeries and other medical procedures are putting pressure on the bottom line [6] - Unfavorable currency movements are expected to negatively impact revenues by $125 million to $175 million in the fourth quarter [8] Growth Opportunities - Despite challenges, Medtronic has shown resilience with mid-single-digit organic revenue growth [9] - Key growth areas include pulse field ablation, TAVR, neuromodulation, and diabetes businesses, driven by new product launches [10][12][13] - The company has made foundational changes to improve operations and is focusing on fast-growth MedTech markets [15][16] Market Position - Medtronic's stock has declined 5.9% in the fiscal fourth quarter, underperforming compared to industry peers [20] - The company's shares trade at a Price/Earnings ratio of 14.24X, below the industry average of 21.71X and the S&P 500's 20.43X [24][25] Conclusion - Medtronic has significant long-term growth potential but faces macroeconomic headwinds and rising expenses that could impact bottom-line growth [26]

Core Viewpoint - The broader market rally, driven by tech giants like NVIDIA and Tesla, has created a favorable environment for stocks like Medtronic (MDT) to potentially gain momentum [1] Company Performance - Medtronic's stock has been sluggish, declining by 0.8% over the past couple of months, reflecting broader industry challenges such as aggressive tariff policies, trade tensions, and inflationary pressures [2] - Other major MedTech players, including Boston Scientific (BSX) and Abbott (ABT), also showed muted performance, with Boston Scientific increasing by 0.3% and Abbott decreasing by 0.6% during the same period [2] - The broader industry and the S&P 500 index experienced declines of 2.6% and 5%, respectively, during this timeframe [2] Technical Analysis - MDT stock is currently trading below its 14-day and 50-day moving averages, indicating a bearish trend that may deter momentum-driven investors and lead to short-term volatility [5] Market Conditions - The trade war and inflationary concerns have negatively impacted the MedTech sector, particularly for companies with significant global operations like Medtronic [9] - However, recent gains in NVIDIA (over 3%) and Tesla (nearly 12%) have shifted investor sentiment, easing worries about economic disruptions and inflationary pressures affecting Medtronic [9] Long-Term Prospects - Medtronic is strategically expanding its global presence to meet the demand for advanced medical devices, particularly gaining market share in the Cardiovascular segment through product launches [10] - The Hypertension business is poised for major expansion, with Medicare coverage expected for the Symplicity blood pressure procedure within the next eight months [11] - Despite distributor disruptions, Medtronic is scaling production of Hugo RAS, and its Neuroscience portfolios continue to contribute positively [12] - The company anticipates revenue and EPS growth to accelerate in the fourth quarter of fiscal 2025, driven by a diversified innovation pipeline and operational leverage [13] Valuation - MDT stock is currently trading at a forward 12-month P/E of 15.56X, which is lower than the industry average of 21.78X, and is attractively valued compared to peers like BSX (34.97X) and ABT (24.09X) [14] Investment Outlook - Medtronic remains a promising player in the MedTech space, supported by an aggressive expansion strategy and strong fundamentals, offering an attractive entry point for investors [16] - However, macroeconomic issues such as trade tensions and inflation may limit near-term gains [17]