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Medtronic (MDT)
NYSE:MDT
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Medtronic
(NYSE:MDT)
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Rating:71Outperform
Price Target:
$98.00
▲(11.06% Upside)
Action:ReiteratedDate:02/18/26
MDT scores well primarily on solid underlying financial performance led by strong free cash flow, reinforced by a positive earnings call with reiterated guidance and traction across key growth franchises. The score is tempered by weaker near-term technical setup (below key moving averages) and only middling valuation (P/E ~26.9), plus noted data-consistency uncertainty in the latest TTM balance sheet and margin presentation.
Positive Factors
Strong free cash flow generation
Medtronic’s multi-billion-dollar operating and free cash flow is a durable strength, funding R&D, strategic M&A, dividends and the MiniMed separation. Consistent cash conversion supports reinvestment and balance-sheet flexibility through cyclical healthcare demand.
Leading cardiovascular & CRM franchises
Robust growth in cardiovascular and CRM franchises reflects durable clinical adoption and a strong installed base that drives recurring consumables and upgrade cycles. These franchises provide structural revenue resilience and high-margin aftermarket opportunities over several years.
Regulatory/commercial wins and MiniMed progress
FDA clearances, early commercial installations and the planned MiniMed separation are structural catalysts: they broaden product addressable markets, accelerate commercialization of higher-growth platforms, and should allow clearer capital allocation and focused management for diabetes.
Negative Factors
Persistent tariff headwind (~$300M/yr)
Ongoing tariff costs materially compress gross and operating margins absent offsetting pricing or efficiency gains. A multi-hundred-million dollar structural headwind reduces operating leverage, forces tradeoffs between investment and margin recovery, and complicates medium-term planning.
TTM reporting inconsistencies and gross-margin anomaly
Apparent data-consistency and TTM gross-margin anomalies undermine confidence in recent financial snapshots. Reliable, consistent reporting is essential for forecasting cash flow, margins and capital allocation; ambiguity increases forecast risk and complicates durable fundamental assessment.
Subsegment softness & execution bottlenecks
Underperformance in neuroscience and surgical lines, plus staffing constraints for CAS rollout, signal execution risk. Weakness in these subsegments and scaling bottlenecks can blunt franchise momentum, delay revenue mix improvement, and reduce near-to-medium term margin recovery.
Medtronic (MDT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$113.29B
Dividend Yield2.76%
Average Volume (3M)8.76M
Price to Earnings (P/E)28.3
Beta (1Y)0.49
Revenue Growth5.34%
EPS Growth13.15%
CountryUS
Employees95,000
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)1.36
Shares Outstanding1,283,885,000
10 Day Avg. Volume8,637,024
30 Day Avg. Volume8,763,094
Financial Highlights & Ratios
PEG Ratio0.75
Price to Book (P/B)2.25
Price to Sales (P/S)3.23
P/FCF Ratio20.87
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue3.96
Enterprise Value/Gross Profit6.39
Enterprise Value/Ebitda15.01
Forecast
1Y Price Target
$114.08Price Target Upside29.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)5.65
Revenue Forecast (FY)$36.16B
Medtronic Business Overview & Revenue Model
Company DescriptionMedtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products. The company's Medical Surgical Portfolio segment offers surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, surgical artificial intelligence and robotic-assisted surgery products, hernia mechanical devices, mesh implants, gynecology and lung products, and various therapies to treat diseases, as well as products in the fields of minimally invasive gastrointestinal and hepatologic diagnostics and therapies, patient monitoring, airway management and ventilation therapies, and renal disease. Its Neuroscience Portfolio segment offers products for spinal surgeons; neurosurgeons; neurologists; pain management specialists; anesthesiologists; orthopedic surgeons; urologists; urogynecologists; interventional radiologists; ear, nose, and throat specialists; and systems that incorporate energy surgical instruments. It also provides image-guided surgery and intra-operative imaging systems and robotic guidance systems used in robot assisted spine procedures; and therapies for vasculature in and around the brain. The company's Diabetes Operating Unit segment offers insulin pumps and consumables, continuous glucose monitoring systems, smart insulin pen systems, and consumables and supplies. The company was founded in 1949 and is headquartered in Dublin, Ireland.
How the Company Makes MoneyMedtronic primarily makes money by selling medical devices, implants, and related consumables to healthcare providers (e.g., hospitals and clinics) and, in certain categories, directly or indirectly supporting ongoing patient use through recurring supplies. Key revenue streams include: (1) Implantable and capital devices: one-time (or episodic) sales of higher-value devices such as pacemakers/defibrillators, heart-related implants, neurostimulation and spinal systems, and surgical equipment used in operating rooms. (2) Recurring disposables and consumables: repeat purchases tied to procedure volume and installed base, such as surgical instruments, stapling and energy devices, catheters, leads, and other single-use or limited-use items that accompany procedures or work with Medtronic platforms. (3) Diabetes supplies and ecosystem revenue: revenue from insulin pumps and associated ongoing supplies (e.g., infusion sets and reservoirs), and related technologies where applicable; this tends to create a more recurring revenue profile versus purely implant-based businesses. (4) Services and software/therapy management: revenue from device servicing, maintenance, training, and digital or therapy-management offerings where applicable, often tied to provider relationships and the installed base of equipment. Medtronic’s earnings are influenced by clinical adoption and procedure volumes, reimbursement and healthcare spending trends, the scale of its global distribution and hospital contracting, and long-term provider relationships; specific partnership details are null.
Medtronic Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Medtronic is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Medtronic is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyMedtronic Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call presents materially more positive operational and financial developments than negatives: strong top-line beat, multiple high-growth product franchises showing early traction (CAS/PFA, CRM products, MiniMed), regulatory approvals and early commercialization wins (Hugo, Stealth AXiS), and improved margins and EPS above guidance. Headwinds include mix-related gross margin pressure from early-stage launches, tariff and tax impacts, some softer neuroscience and surgical subsegments, and temporary dilution around the MiniMed separation and M&A. Management provided quantified guidance on tariff impacts and reiterated fiscal guidance while outlining a clear path for margin recovery and growth investments.Q3-2026 Updates
Positive Updates
Strong Top-Line Performance
Revenue of $9.0 billion, up 8.7% reported and 6% organic year-over-year; 50 basis points acceleration from the prior quarter and 50 basis points above guidance.
Cardiovascular Portfolio Strength
Cardiovascular revenue grew 11% year-over-year (13% in the U.S.). CAS (pulmonary vein ablation related) grew 80% year-over-year, with PFA accounting for 80% of CAS revenue.
Cardiac Rhythm Management Momentum
CRM represented 15% of total revenue and grew 5% driven by continued double-digit Micra growth, mid-teens growth in the 3830 CSP lead, and over 70% growth in Aurora EV ICD.
Diabetes (MiniMed) Outperformance and Separation Progress
MiniMed delivered 15% reported and over 8% organic growth, led by double-digit international growth and U.S. acceleration from recent Simplera Sync and Instinct launches. Multiple FDA clearances expanded 780G indications; 780G now available through pharmacy to cover majority of commercially insured U.S. lives. Planned separation (IPO + split) remains on track for completion by end of calendar 2026.
Simplicity (Renal Denervation) Early Demand Signals
Direct-to-consumer Go Beyond campaign produced a ~50x increase in website visits versus the prior quarter (cited increase from ~50,000 to ~2.5 million visits between earlier quarter and Q3), >200 new accounts opened, ~150 physicians on Physician Finder and ~100 million covered lives for Ardian—strong leading indicators of market build.
Altaviva Launch Traction
Altaviva tibial neurostimulation receiving strong early physician/patient interest; device offers up to 15 years battery life, MRI-ready, no imaging/sedation; training of 500+ physicians underway to support rollout.
Hugo Robot U.S. Clearance and Early Installations
Hugo received FDA clearance for urologic procedures and completed first U.S. installations and initial cases (Cleveland Clinic). Touch Surgery installations increased >20% sequentially and surpassed 1,000 systems globally.
Stealth AXiS Approval for Spine Robotics/Navigation
FDA clearance secured for Stealth AXiS surgical system unifying AI-powered planning, robotics and navigation; navigation currently drives ~70% of U.S. spine procedures and Stealth AXiS expected to contribute to Neurosurgery/CST as soon as Q4.
Margins, EPS and Financial Discipline
Adjusted gross margin of 64.9% and adjusted operating margin of 24.1%, both ahead of expectations. Adjusted EPS $1.36, $0.03 above the midpoint of guidance. Adjusted SG&A leveraged to 32.3% of revenue, down 30 basis points year-over-year while funding targeted launches and marketing.
Reiterated Guidance and Outlook
Reiterated fiscal '26 organic revenue growth guidance of ~5.5% and expects Q4 growth similar to Q3 (~6%). Company maintains expectation for high single-digit EPS growth in fiscal year '27 and expects fiscal '26 adjusted operating profit to grow ~5% (7% excluding tariffs).
Negative Updates
Neuroscience Growth Below Expectations
Neuroscience grew 3%, below company expectations this quarter. Specialty Therapies was flat and some Neurovascular pressure from recent China VBP and the Vantage recall, though management said these are mostly behind them.
Surgical Segment Softness
Surgical business grew only 1% with expected softness in stapling; while Hugo is early and promising, surgical revenue contribution from Hugo will take time to meaningfully move the larger surgical line.
Gross-Margin Mix Headwind from CAS and Diabetes
Product mix was a -100 basis point drag on gross margin this quarter, mostly driven by CAS (early-stage launch mix of capital vs. catheters) and Diabetes manufacturing ramp for Simplera; management expects mix to improve over time but it pressured margins in the quarter.
Tariff and FX Headwinds
Tariffs reduced results by $93 million (approx. 110 basis points) this quarter. Management expects fiscal '26 tariff impact of ~$185 million (including ~$75 million in Q4) and a carryover into fiscal '27 of roughly $75 million per quarter (~$300 million full-year headwind).
Higher-Than-Forecast Tax Rate
Adjusted tax rate was 17.3%, about 100 basis points higher than forecast, creating headwind to EPS and expected to continue into Q4.
Structural Heart U.S. Pressure
Structural heart grew low single digits for the quarter; international strength was offset by U.S. pressure as the company annualized the Evolut FX Plus launch and faced competitive dynamics.
Near-Term Dilution Risks Around Separation and M&A
Management flagged temporary dilution between the MiniMed IPO and final split (~$0.01–$0.02 per month) and embedded M&A dilution of ~$0.04–$0.05 in guidance. Interest expense headwinds expected from refinancing older low-rate debt to higher current rates.
Hiring/Execution Bottlenecks for CAS Expansion
Expansion of CAS relies on hiring 'mappers' and building referral pathways; management cited mapper hiring as a bottleneck that they are focused on managing as the launch scales.
Company Guidance
Management reiterated fiscal 2026 guidance calling for approximately 5.5% organic revenue growth (Q4 expected to be similar to Q3, around 6%), maintained fiscal‑2026 adjusted EPS guidance of $5.62–$5.66 and said adjusted operating profit should grow ~5% (≈7% excluding tariffs); they expect fiscal‑2026 gross margin to increase slightly ex‑tariffs but to decline roughly 30 basis points including an anticipated $185M tariff headwind (about $75M in Q4), with operating margin roughly flat ex‑tariffs and down ~50 bps including tariffs, and gross‑ and operating‑margin leverage ex‑tariffs in H2 FY26. Management also noted modeling items for FY27: the tariffs carry about $75M/quarter (~$300M full year), an extra 53rd week will add growth, they’ve embedded ~$0.04–$0.05 of EPS dilution from M&A and expect temporary dilution of ~$0.01–$0.02 per month around the MiniMed IPO→split window, and they continue to target high‑single‑digit EPS growth in fiscal 2027.Medtronic Financial Statement Overview
Summary
Fundamentals are solid overall: modest TTM revenue growth (+2.1%) with healthy net margin (~13%) and standout cash generation (TTM operating cash flow ~$7.3B; free cash flow ~$5.4B; FCF growth +3.9%). Offsetting this, the dataset flags material data-consistency risks (implausible TTM balance sheet snapshot) and uncertainty from the sharply lower TTM gross margin shown versus prior annual levels.Income Statement
Revenue is growing modestly in TTM (Trailing-Twelve-Months) (+2.1%) following steady low-single-digit growth in recent annual periods (after a decline in 2023). Profitability remains solid with a healthy TTM net margin (~13%) and stable operating profitability, but the TTM gross margin shown (~16%) is a major deterioration versus prior annual results (~65%) and creates uncertainty around reported cost structure/consistency.78
Positive
Balance Sheet
Annual balance sheets show moderate leverage with debt-to-equity improving from ~0.51 (2021) to ~0.46 (2022) before ticking up to ~0.59 (2025), which is manageable for a large med-device company. Returns on equity are positive and improving versus 2023–2024 levels. However, the TTM (Trailing-Twelve-Months) balance sheet appears incomplete/implausible (debt and equity shown as 0, assets far below annual levels), limiting confidence in the most recent snapshot.70
Positive
Cash Flow
Cash generation is a key strength: TTM (Trailing-Twelve-Months) operating cash flow (~$7.3B) and free cash flow (~$5.4B) are strong, with positive free cash flow growth (+3.9%). Free cash flow runs at a healthy portion of net income (TTM ~0.73; similar to ~0.74–0.81 historically), supporting flexibility. A watch item is the volatility in year-to-year free cash flow growth (notably declines in 2021 and 2023) and an unusually high TTM operating cash flow-to-net income relationship versus the annual pattern.84
Very Positive
| Breakdown | TTM | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 | Apr 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 35.48B | 33.54B | 32.36B | 31.23B | 31.69B | 30.12B |
| Gross Profit | 21.98B | 21.91B | 21.15B | 20.51B | 21.54B | 19.63B |
| EBITDA | 9.36B | 9.22B | 8.20B | 8.70B | 8.78B | 7.52B |
| Net Income | 4.61B | 4.66B | 3.68B | 3.76B | 5.04B | 3.61B |
Balance Sheet | ||||||
| Total Assets | 91.48B | 91.68B | 89.98B | 90.95B | 90.98B | 93.08B |
| Cash, Cash Equivalents and Short-Term Investments | 8.38B | 8.96B | 8.01B | 7.96B | 10.57B | 10.82B |
| Total Debt | 28.07B | 28.52B | 25.02B | 24.36B | 24.11B | 26.39B |
| Total Liabilities | 42.29B | 43.42B | 39.56B | 39.28B | 38.26B | 41.48B |
| Stockholders Equity | 48.98B | 48.02B | 50.21B | 51.48B | 52.55B | 51.43B |
Cash Flow | ||||||
| Free Cash Flow | 5.41B | 5.18B | 5.20B | 4.58B | 5.98B | 4.88B |
| Operating Cash Flow | 7.29B | 7.04B | 6.79B | 6.04B | 7.35B | 6.24B |
| Investing Cash Flow | -2.51B | -1.94B | -2.37B | -3.49B | -1.66B | -2.87B |
| Financing Cash Flow | -5.21B | -4.36B | -4.45B | -4.96B | -5.34B | -4.14B |
Medtronic Technical Analysis
Negative
88.24
Price Trends
97.57
Negative
97.15
Negative
93.61
Negative
Market Momentum
-3.03
Positive
29.14
Positive
13.26
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MDT, the sentiment is Negative. The current price of 88.24 is below the 20-day moving average (MA) of 93.77, below the 50-day MA of 97.57, and below the 200-day MA of 93.61, indicating a bearish trend. The MACD of -3.03 indicates Positive momentum. The RSI at 29.14 is Positive, neither overbought nor oversold. The STOCH value of 13.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MDT.
Medtronic Risk Analysis
Medtronic disclosed 34 risk factors in its most recent earnings report. Medtronic reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Medtronic Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $25.53B | 30.97 | 32.44% | ― | 14.21% | 5.66% | |
75 Outperform | $48.53B | 46.44 | 10.39% | ― | 0.19% | 65.58% | |
71 Outperform | $113.29B | 28.29 | 9.54% | 2.76% | 5.34% | 13.15% | |
68 Neutral | $103.56B | 48.91 | 12.53% | ― | 21.62% | 54.80% | |
67 Neutral | $133.77B | 41.38 | 15.04% | 0.95% | 10.95% | -18.32% | |
62 Neutral | $191.06B | 33.55 | 12.89% | 1.88% | 6.37% | 142.39% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
MDT
Medtronic
88.44
-0.95
-1.06%
ABT
Abbott Laboratories
110.71
-13.26
-10.70%
BSX
Boston Scientific
71.20
-28.02
-28.24%
DXCM
Dexcom
67.32
-3.38
-4.78%
EW
Edwards Lifesciences
84.27
13.93
19.80%
SYK
Stryker
349.11
-24.28
-6.50%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.