Medtronic (MDT) Stock Forecast & Price Target

Medtronic demonstrated strong financial performance, reporting organic growth across key segments: Cranial & Spinal Technologies with 4.7%, Neuromodulation at 7.3%, and notable revenues in Diabetes of $757 million, which surpassed expectations with a year-over-year increase of 7.1%. The Cardiovascular segment stood out with a remarkable 71% growth in Cardiac Ablation revenue, reflecting the company's successful expansion and increasing adoption rates for its pump and sensor products. Additionally, Medtronic's management anticipates continued growth momentum and market share gains through FY26, bolstered by its innovative product offerings and expanding international presence.

Medtronic's outlook appears negative due to several fundamental challenges that may hinder its financial performance. Key issues include slower-than-expected product uptake, particularly amid increasing competition, potential supply chain disruptions, and a limited ability to expand operating margins, which was reflected in the lowered gross margin guidance to 65.3%. Additionally, the company's reliance on successful product launches and execution on revenue and margin goals raises concerns, particularly in light of delays and underperformance in core markets such as US Diabetes and Specialty Therapies.