Medtronic (MDT) shares climbed 5.4% to $77.74 in afternoon trading Wednesday, outperforming the broader healthcare sector and major U.S. indexes, after the medical device giant reported fiscal fourth-quarter results that topped Wall Street estimates. The company posted adjusted earnings of $1.55 per share on revenue of $9.807 billion, exceeding analyst expectations of $1.54 per share and $9.63 billion, respectively.
Revenue growth was robust, rising 9.9% as reported and 6.6% on an organic basis, which excludes currency fluctuations and certain deal activity. The standout performer was the cardiac ablation segment, which saw worldwide revenue surge 78% and U.S. revenue jump 124%, capturing eight percentage points of market share in the United States. Cardiovascular sales overall rose 13.8% to $3.797 billion, driven by demand for complex cardiac procedures.
CEO Geoff Martha highlighted that the company experienced its strongest annual top-line growth in a decade, while CFO Thierry Piéton confirmed that both revenue and earnings per share exceeded internal targets. The company is investing in emerging technologies, including ICE catheter technology from Beluga Medical and China's CardioACC, which are used for imaging inside the heart during electrophysiology procedures.
However, the rally was tempered by the company's fiscal 2027 profit guidance, which came in at $5.90 to $6.00 per share on an adjusted basis, below the $6.06 consensus estimate. Medtronic also disclosed it is bracing for a $250 million hit from tariffs, and the planned spin-off of its diabetes business remains uncertain, with CEO Piéton noting the company is not under pressure to separate the unit soon due to soft medtech markets.
On the robotics front, Medtronic has filed 510(k) submissions with the U.S. FDA for its Hugo robotic-assisted surgery system, targeting general and gynecologic procedures. This move could position Hugo to compete more directly with Intuitive Surgical's da Vinci system. The company also received FDA clearance for its ProGrip Advanced mesh for use in robotic-assisted ventral hernia repair.
Analyst reaction was mixed. RBC Capital Markets' Shagun Singh expressed encouragement by Medtronic's growth initiatives, particularly in cardiac ablation and electrophysiology, and noted that the renal denervation treatment for hypertension remains underappreciated. Mizuho's Anthony Petrone lowered his price target to $100 from $120 but maintained an Outperform rating, suggesting lingering support for the stock despite ongoing uncertainties.
Investors continue to weigh the company's growth prospects against headwinds from tariffs, margin pressures, and the timing of the diabetes business separation. Medtronic's ability to sustain momentum in cardiovascular devices, robotics, and bolt-on acquisitions will be key to navigating these challenges.
