Medtronic (MDT) Stock Down 26%: Why Wall Street Is Calling It a Strong Buy

Key Takeaways

• Fourth-quarter revenue reached $9.7 billion, marking 9.9% year-over-year growth — the company’s strongest annual revenue expansion in ten years
• Shares currently trade at 13.5x forward earnings, below the 10-year historical average of 16x and cheaper than competitors including Abbott and Stryker
• Cardiac Ablation Solutions experienced explosive growth with 78% worldwide revenue increase and 124% surge in U.S. markets, capturing share from Boston Scientific
• Hugo robotic surgical platform is positioned approximately 40% below Intuitive Surgical’s da Vinci pricing, targeting an industry expected to surpass $54 billion
• Wall Street firms TD Cowen and RBC Capital Markets maintain price objectives of $119 and $118, suggesting potential gains exceeding 50% from present levels

Medtronic (MDT) shareholders have endured a challenging period. The medical device leader developed a track record of underwhelming performance, which the market has punished accordingly. However, the narrative appears to be shifting.

Medtronic plc, MDT

The corporation’s fiscal 2026 fourth-quarter earnings, disclosed on June 3, exceeded Wall Street expectations. Top-line revenue climbed 9.9% compared to the prior year, reaching $9.7 billion. Full-year growth landed at 8.4% — marking the strongest annual revenue expansion the company has delivered in a decade.

Shares of MDT currently change hands near $78, representing a significant decline from the 52-week peak of $106.33. With a forward earnings multiple of 13.5 and a dividend yielding 3.7%, the valuation appears attractive both historically and when benchmarked against industry competitors.

The stock’s historical 10-year forward P/E ratio hovers around 16. Industry peers including Abbott, Boston Scientific, Johnson & Johnson, and Stryker command price-to-sales multiples near 4. Medtronic’s currently stands at 2.8.

RBC Capital Markets’ Shagun Singh maintains an Outperform designation with a $118 price objective. TD Cowen reaffirmed its Buy recommendation alongside a $119 target. Both firms highlight a common theme: Medtronic stands at the threshold of a significant product innovation wave.

Cardiovascular Segment Leads with Ablation Technology

The cardiovascular division represents the brightest spot in the portfolio. Accounting for approximately 39% of consolidated sales, this segment delivered 10% year-over-year expansion to $3.8 billion in the most recent quarter.

Within this category, Cardiac Ablation Solutions (CAS) demonstrates exceptional momentum. Revenue soared 78% globally and an impressive 124% across U.S. markets. The franchise is expanding at double the underlying market growth rate while capturing eight percentage points of additional market position.

This competitive gain comes directly from Boston Scientific’s customer base, which acknowledged PFA market share erosion when revising its annual guidance downward. Boston Scientific’s stock has tumbled 51% year to date.

Medtronic’s competitive advantage stems from being the sole provider with dual FDA-approved pulsed field ablation technologies: PulseSelect and the Affera System. Affera uniquely integrates PFA and radio-frequency capabilities with built-in cardiac mapping technology. CEO Geoff Martha noted the U.S. installed base expanded 40% sequentially during the latest quarter.

Robotic Surgery Platform Targets Expanding Market

Extending beyond cardiovascular applications, Medtronic’s Hugo robotic-assisted surgical platform represents one of the portfolio’s most compelling long-term growth drivers.

Hugo secured FDA authorization for urological procedures in 2025. Additional submissions for general surgery and gynecological applications are currently under review. The system carries pricing approximately 40% lower than Intuitive Surgical’s dominant da Vinci platform.

Robotic-assisted procedures currently represent under 5% of total surgical volume globally. Industry forecasts project the worldwide market expanding beyond $54 billion throughout the coming decade.

In the neuroscience division, fourth-quarter revenue advanced 5%. Medtronic also obtained FDA clearance this year for an innovative Stealth AXiS Spine application designed for brain surgery procedures, broadening its AiBLE surgical ecosystem.

Regarding renal care, Needham reaffirmed its Buy rating and $101 price objective this week, highlighting Symplicity Spyral sales reaching an annualized run rate of $100 million. Medicare reimbursement coverage commenced in October 2025.

For fiscal year 2027, management is projecting organic revenue growth between 6.75% and 7.25%, with adjusted earnings per share guidance of $5.90 to $6.00, representing approximately 8% growth from the prior year’s $5.53.

The company has increased its dividend payment for 49 consecutive years. The present quarterly distribution stands at $0.72 per share.

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