Medtronic (MDT) Raises its Outlook Again as Heart Device Demand Keeps Climbing

Medtronic (MDT) Raises its Outlook Again as Heart Device Demand Keeps Climbing

Fatima Gulzar

Thu, September 17, 2026 at 5:34 PM GMT+3 4 min read

• MDT +0.02%

Reuters reported that Medtronic plc (NYSE:MDT) raised the lower end of its fiscal 2027 profit forecast and its revenue growth outlook on September 1, banking on strong demand for heart devices used in complex cardiovascular procedures.

The Ireland-based company raised the lower end of its adjusted per-share profit forecast to $5.94 from $5.90, keeping the upper end at $6.00, versus an analyst average of $5.95. Medtronic now expects annual organic revenue growth of 7.25% to 7.75%, up from 6.75% to 7.25% previously. First-quarter fiscal 2027 revenue reached $9.756 billion, up 13.7% both reported and organically, beating the $9.55 billion analyst consensus, with adjusted earnings per share of $1.45 topping the $1.39 estimate. Growth by segment was broad-based: Cardiovascular revenue rose 19.5%, Diabetes 16.9%, Neuroscience 10.3%, and Medical Surgical 10.0%. Medtronic said about $570 million of the quarter's growth came from an extra week in the reporting period.

The guidance still includes the diabetes business, which Medtronic has said it may fully separate before fiscal year-end, though CFO Thierry Pieton said the company is "not under pressure" to rush that timeline.

Bull Case

The beat was not just the product of one strong segment. Revenue topped consensus by roughly $200 million and EPS beat by six cents, while every major franchise posted double-digit growth: Cardiovascular rose 19.5%, Diabetes jumped 16.9%, Neuroscience grew 10.3%, and Medical Surgical advanced 10.0%. This broad growth reduces Medtronic's reliance on any single product line.

Management continues to add new growth catalysts to an already strong core business. Medtronic's roughly $700 million partnership with Cornerstone Robotics gives it distribution rights to the Sentire surgical robot. Its pulsed field ablation and transcatheter aortic valve technologies are gaining physician adoption. These products give Medtronic growth opportunities beyond its existing portfolio.

Medtronic plc (NYSE:MDT)'s management has raised guidance twice in recent quarters. It shows that Medtronic is outperforming its own expectations. CEO Geoff Martha also said recent deals should contribute more revenue beyond fiscal 2027. It gives investors more confidence in sustained growth rather than a one-quarter boost.

Bear Case

Even after the guidance increase, Medtronic plc (NYSE:MDT) still trails some earlier analyst expectations. The new $5.94-to-$6.00 EPS range remains below the $6.06 per share that some analysts had projected earlier this year. The company expects a $250 million tariff headwind in fiscal 2027. Those pressures could limit earnings growth despite the stronger outlook.

Medtronic's diabetes business remains a source of uncertainty. Management still includes the business in fiscal 2027 guidance. However, a separation before fiscal year-end could force the company to revise its outlook. The separation could also distract management and complicate Medtronic's growth strategy as it expands across its other medical-device franchises.

Medtronic faces well-capitalized competitors across the growth markets it targets. Abbott and Dexcom compete aggressively in glucose monitoring. Johnson & Johnson competes strongly in electrophysiology and heart devices. Hence, Medtronic needs to gain market share to sustain its recent pace and continue beating expectations.

Hedge Fund Data

Insider Monkey's database shows Medtronic plc (NYSE:MDT) was held by 67 hedge funds in the second quarter of 2026, up from 60 in the first quarter, with holdings value more than doubling to $3.77 billion from $1.72 billion. Johnson & Johnson, its larger rival in heart devices and electrophysiology, was held by more funds, 117, up from 113, though its holdings value slipped slightly to $10.16 billion from $10.34 billion.

Conclusion

Medtronic plc (NYSE:MDT)'s solid results, broad growth, and higher guidance give a bullish outlook as new technologies and partnerships create more growth opportunities. However, tariff costs, uncertainty around the diabetes business, and intense competition could limit earnings growth and make it harder for Medtronic to sustain its recent momentum. Investors should watch whether Medtronic can turn its expanding portfolio and strong demand into durable earnings growth as well as protect market share across its key franchises.

While we acknowledge the potential of MDT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

READ NEXT: Amazon (AMZN) is About to 6X Its Drone Delivery Footprint to Compete With Rivals Like DoorDash (DASH) and Alphabet (GOOGL)'s Early SpaceX (SPCX) Investment Skyrockets 100-Fold to $94 Billion Over a Decade.

Disclosure: None. Follow Insider Monkey on Google News.