Core Insights - Medtronic (MDT) is scheduled to announce its second-quarter fiscal 2026 results on November 18, with expectations of strong performance based on previous earnings surprises [1][2] Group 1: Financial Performance Estimates - The Zacks Consensus Estimate for Medtronic's revenues in the fiscal second quarter is $8.86 billion, indicating a 5.4% year-over-year increase [2] - The consensus estimate for EPS is projected to rise 4% to $1.31, with earnings estimates remaining unchanged over the past 60 days [2] Group 2: Segment Performance Cardiovascular - The Cardiovascular segment is expected to show strong momentum, with revenues projected to increase by 8.4% year over year, driven by the uptake of PulseSelect and Affera Sphere-9 systems [3][5] - The Evolut FX+ TAVR device is likely to gain traction in various markets, including Japan, benefiting from a competitor's exit [4] Neuroscience - Neuroscience revenues are anticipated to grow by 1.5% year over year, supported by strong sales in Cranial & Spinal Technologies and the adoption of AiBLE spine technology [6][8] - Neuromodulation performance is expected to benefit from U.S. growth in Pain Stim and the approval of the Altaviva device for treating urge urinary incontinence [7] Medical Surgical - Medtronic's Medical Surgical segment is projected to see a 5.4% year-over-year revenue increase, driven by demand for LigaSure technology and growth in the Advanced Energy product line [10][11] Diabetes - The Diabetes unit is expected to experience a 9.2% year-over-year revenue growth, fueled by the MiniMed 780G and Simplera Sync sensors [9][14] - Key FDA approvals during the quarter, including the SmartGuard algorithm and MiniMed 780G for type 2 diabetes, are likely to contribute to revenue growth [13][14] Group 3: Earnings Expectations - Medtronic currently holds a Zacks Rank of 3 (Hold) with an Earnings ESP of 0.00%, indicating a neutral outlook for beating estimates [15]

Core Viewpoint - Medtronic is positioned as a strong investment option amid potential economic challenges, particularly due to its pricing power and innovative product offerings that can help mitigate inflationary pressures [2][12]. Pricing Power - Companies with substantial pricing power can navigate inflationary environments effectively. Medtronic, as a leading medical device company, possesses a diverse product portfolio and thousands of patents that provide it with a competitive edge and pricing power [4][6]. - While alternatives exist for some of Medtronic's devices, it remains a market leader in specific areas, such as the recently cleared PulseSelect device for heart rhythm disorders, which enhances its pricing power [5][6]. Innovation and Growth Potential - Medtronic continues to innovate, with upcoming products like the Hugo robotic-assisted surgery system expected to drive growth. The RAS market is underpenetrated, presenting a significant opportunity for Medtronic [7][8]. - The Hugo system is anticipated to enter a market with limited competition, particularly in urologic procedures, which could lead to improved patient outcomes and further establish Medtronic's market position [8]. Financial Resilience and Dividend Performance - Medtronic has demonstrated consistent financial performance, with revenue and earnings growth even during economic downturns. The company has a strong track record of dividend payments, having increased its dividends for 48 consecutive years, moving towards Dividend King status [9][11]. - The ability to reinvest dividends can help investors combat inflation over the long term, making Medtronic an attractive option for those concerned about rising prices [12].

Company Overview - Medtronic PLC is the largest medtech company globally by revenue, with a history of innovation and market leadership since the 1940s [3] - The company's revenue segments include Cardiology (37%), Neuroscience (29%), Medical Surgical (25%), and Other (9%) [3] Stock Performance - Medtronic's stock price has appreciated only 15% over the past decade and has decreased by 8% in the last five years, indicating long-term investor frustration [4] - The company has delivered mid-single digit revenue growth for the past 10 years, which has been underwhelming compared to peers [4] Strategic Changes - Following engagement with Elliott Investment Management, Medtronic appointed John Groetelaars and Bill Jellison to its board and formed a Growth Committee and an Operating Committee [2][5] - The Growth Committee will focus on portfolio management, identifying tuck-in M&A opportunities, and reviewing existing business inefficiencies [5] - The Operating Committee aims to address margin challenges and improve gross margin expansion, which has eroded approximately 500 basis points since the Covid-19 pandemic [6] Future Growth Prospects - Medtronic plans to spin off its diabetes business within the next 15 months to concentrate on core operations [7] - Two product developments, PulseSelect and Symplicity Spyral, are expected to contribute significantly to long-term growth [7] Activist Engagement - Elliott Investment Management has successfully completed the activist phase of its engagement and is now focused on the business turnaround [8] - The addition of directors with extensive medtech experience is aimed at enhancing the company's strategic direction [8]

Core Insights - The demand for medical devices used in innovative drug development remains strong, with cardiovascular medical devices and surgical robots being key growth drivers, while the diagnostic testing market continues to show weakness [1] Group 1: Company Performance - Thermo Fisher Scientific raised its annual profit forecast, citing strong demand for drug development products, leading to a 12% increase in its stock price [3] - Danaher also raised its annual profit forecast, highlighting a stable demand from pharmaceutical clients for bioprocessing services, with monoclonal antibodies accounting for over 75% of its bioprocessing revenue [3] - Boston Scientific increased its annual profit forecast due to strong demand for cardiovascular medical devices and reduced its tariff-related cost impact from $200 million to $100 million [4] - Johnson & Johnson reported over 6% growth in medical device sales, reaching $8.54 billion, driven by strong performance in cardiovascular devices [4][5] - Intuitive Surgical reported better-than-expected profits and revenues, with a 17% year-over-year increase in global da Vinci surgical procedures [5] Group 2: Market Trends - The cardiovascular medical device market is experiencing robust growth, with companies like Boston Scientific and Johnson & Johnson leading the way [4][5] - The surgical robotics sector is becoming a critical growth engine for medical technology companies, benefiting from increased accessibility in minimally invasive therapies [5] - The diagnostic business is facing challenges, as evidenced by Abbott's downward revision of profit expectations due to declining demand [5]