Medtronic (MDT) shares edged lower on Friday, closing at $81.67, down 0.32% from the previous session. The stock had surged nearly 5% earlier in the week after the company reported better-than-expected fiscal fourth-quarter results, but the initial enthusiasm faded as investors weighed the implications of a significant tariff headwind and cautious profit guidance.
The medical device giant posted revenue of $9.807 billion for the quarter ended April 25, representing a 9.9% increase year-over-year on a reported basis, or 6.6% on an organic basis, which excludes currency fluctuations and certain asset sales. This marked the company's strongest annual top-line growth in a decade, according to CEO Geoff Martha. Medtronic also raised its quarterly dividend by 4.3% to $0.72 per share.
However, the company's outlook for fiscal 2027 tempered the positive sentiment. Medtronic forecast non-GAAP diluted earnings per share in the range of $5.90 to $6.00, which fell short of the LSEG consensus estimate. Additionally, management warned of a $250 million impact from tariffs in the coming fiscal year, a factor that could pressure margins. The company targets organic revenue growth of 6.75% to 7.25% for fiscal 2027.
The heart-device segment was a key driver of the quarter's performance, with strong demand for products used in complex cardiac procedures. Medtronic highlighted investments in Beluga Medical and CardioACC, two private firms developing ICE (intracardiac echocardiography) catheter technology, which provides real-time imaging during electrophysiology procedures. "There is demand for better technologies in electrophysiology," said Rebecca Seidel, president of Cardiac Ablation Solutions at Medtronic.
In the surgical arena, Medtronic made progress with its Hugo robotic-assisted surgery system, filing 510(k) submissions to expand its U.S. indications for general and gynecologic procedures. The company also received clearance for its ProGrip Advanced mesh for robotic-assisted ventral hernia repair. Matt Anderson, head of Medtronic's Surgical business, noted that the Hugo steps represent more than just a portfolio expansion.
Among large-cap medtech peers, performance was mixed on Friday. Abbott Laboratories (ABT) rose 0.32% to $91.07, Boston Scientific (BSX) fell 0.61% to $48.55, and Stryker (SYK) gained 1.47% to $305.66. Medtronic's stock movement was in the middle of the pack.
Looking ahead, Medtronic has no investor events scheduled for the coming week, leaving the stock to trade on post-earnings momentum, broader market trends, and interest from dividend-focused investors. The next ex-dividend date is set for June 26. Analyst sentiment remains broadly positive, with 13 buy ratings and 9 hold ratings among 22 analysts tracked over the last three months, and no sell recommendations.
Risks remain, however. The tariff impact could be more severe than anticipated, the potential split of the MiniMed diabetes business may face delays in a weak medtech market, and FDA device filing reviews could proceed slower than hoped. CFO Thierry Piéton stated that the company is not "under pressure" to set a hard deadline for separating MiniMed, leaving strategic options open.
Trading volume surged to 15.29 million shares on Friday, well above the 11.21 million average, indicating heightened investor interest. Whether this momentum can be sustained will become clearer in the days ahead.
