Overview
Truist Securities has revised down its price target on Medtronic, Inc. (NYSE:MDT) to $103 from $107 while maintaining a Hold recommendation. The new target sits near InvestingPro's Fair Value metric, which assesses the medical device company as fairly valued with a market capitalization of $125.56 billion.
Quarterly performance
Medtronic reported organic revenue growth of 6 percent, slightly ahead of the 5.6 percent consensus estimate. The company posted earnings per share of $1.36, beating the $1.31 consensus cited by analysts and aligning with Medtronic's 6.88 percent revenue growth over the prior twelve months. Management reaffirmed its fiscal year 2026 guidance following the results.
Performance was positive across three of Medtronic's four reporting segments. The Diabetes and Cardiovascular businesses led the gains. Diabetes growth was supported by strength outside the United States, while Cardiovascular momentum was underpinned by activity in electrophysiology and pulsed field ablation. The Neurosciences segment lagged, weighed down by softer results in Specialty Therapies.
InvestingPro data characterizes Medtronic's balance-sheet and operational position with a "Good" overall financial health score and identifies the company as a major participant in the Healthcare Equipment & Supplies industry.
Guidance and forward-looking commentary
Company management reiterated preliminary expectations for fiscal year 2027 that call for acceleration in revenue growth and high single-digit earnings per share growth. Those projections factor in an extra selling week scheduled in the first quarter of fiscal 2027. Truist highlighted several concrete revenue catalysts that could support those targets, including cardiac ablation solutions and renal denervation initiatives.
For income-focused investors, Medtronic's long record of shareholder distributions remains notable. The company has paid dividends for 49 consecutive years and currently offers a dividend yield of 2.95 percent.
Analyst stance and valuation considerations
Truist signaled that it would need to see either faster organic top-line growth or stronger EPS expansion to move its rating off Hold. That caution is echoed by valuation metrics cited by InvestingPro, which show Medtronic trading at a price-to-earnings ratio of 27.21. That multiple is viewed as relatively elevated when measured against the company's near-term earnings growth outlook.
InvestingPro also provides further proprietary analysis and financial metrics in a comprehensive Pro Research Report for subscribers, noting eight additional insights specific to Medtronic.
Other analyst reactions and market response
In other analyst activity, Mizuho maintained an Outperform rating and a $125 price target for Medtronic, pointing to robust performance in the company's cardiac ablation business and forecasting that business to reach $1 billion in revenue by the end of the fiscal year. Needham lowered its price target slightly to $120 from $121 but kept a Buy rating, citing margin pressure concerns while acknowledging that third-quarter revenue and EPS beat consensus and that management maintained full-year 2026 guidance.
Separately, Medtronic's fiscal third-quarter results also beat analyst expectations on a slightly different set of estimates, with EPS of $1.36 versus a forecast of $1.34, and revenue of $9.0 billion compared with an anticipated $8.91 billion. Despite those beats, the stock traded lower in pre-market activity.
Conclusion
Overall, the company delivered results that exceeded several consensus estimates and reiterated near-term guidance, but mixed segment performance, valuation considerations and margin pressure have left some analysts cautious. Truist's Hold rating and reduced price target reflect the view that tangible evidence of stronger organic revenue or improved EPS trends will be required before a more positive rating is warranted.
Key points
- Truist cut Medtronic's price target to $103 from $107 and kept a Hold rating - impact on Healthcare Equipment & Supplies sector.
- Medtronic beat revenue and EPS consensus for the quarter; organic revenue grew 6 percent and EPS was $1.36 - impacts medical device and investor income strategies.
- Management reiterated fiscal 2026 guidance and outlined preliminary fiscal 2027 expectations for accelerated revenue and high single-digit EPS growth, with specific revenue drivers noted.
Risks and uncertainties
- Continued weakness in the Neurosciences segment, driven by Specialty Therapies, could weigh on overall company growth - affects the medical device subsector.
- A relatively high P/E ratio of 27.21 versus near-term earnings growth may limit upside and prompt cautious analyst stances - influences valuation-sensitive investors in healthcare stocks.
- Margin pressure noted by some analysts could pressure earnings despite revenue beats, introducing uncertainty for profitability trends - relevant to equity and fixed-income holders exposed to healthcare companies.