Medtronic Earnings Beat Expectations, Raises Guidance Amid Elliott Investment Management Ownership

Medtronic reported Q1 2026 earnings of $8.58 billion, surpassing estimates, and raised sales guidance. The company announced a new Growth Committee to oversee M&A, R&D investments, and potential divestitures, including the planned separation of its Diabetes business. Analysts at Needham and Bernstein maintain a positive outlook, raising price forecasts, while Baird maintains a Neutral rating. Medtronic stock is up 4.07% at $93.56.

Medtronic plc (NYSE: MDT) has reported robust first-quarter (Q1) 2026 earnings, surpassing market expectations. The company announced a new Growth Committee to oversee mergers and acquisitions (M&A), research and development (R&D) investments, and potential divestitures, including the planned separation of its Diabetes business. Analysts at Needham and Bernstein maintain a positive outlook, raising price forecasts, while Baird maintains a Neutral rating. Medtronic stock is up 4.07% at $93.56.

In Q1 2026, Medtronic reported earnings of $8.58 billion, exceeding estimates. The company's non-GAAP diluted earnings per share (EPS) reached $1.26, surpassing the anticipated $1.23, while the GAAP diluted EPS stood at $0.81, marking a 1% increase from the previous year [1].

Key drivers for this growth included significant gains in the Cardiac Ablation Solutions segment, which saw a nearly 50% increase, with a remarkable 72% growth in the U.S. market. The company’s Cardiovascular and Diabetes segments also contributed to the overall revenue increase, with 9.3% and 11.5% growth, respectively. Medtronic’s success was largely attributed to its innovative product lines, including Pulsed Field Ablation and Transcatheter Valves, which have consistently driven revenue [1].

Despite the positive performance, the company’s operating margin showed mixed results. The GAAP operating margin increased by 70 basis points to 16.8%, while the non-GAAP operating margin decreased by 80 basis points to 23.6%. These figures reflect the company’s strategic investments in research and development, sales, and marketing to support long-term growth objectives [1].

Medtronic has raised its fiscal year 2026 EPS guidance, reflecting its confidence in continued growth. The company now anticipates diluted non-GAAP EPS growth of approximately 4.5%, up from the previous guidance of 4%. This adjustment accounts for a reduced potential impact from tariffs, which are expected to decrease from an earlier estimate of $200 million to $350 million, down to approximately $185 million [1].

The company maintains its forecast for organic revenue growth at about 5% for FY26. Including the effects of foreign currency exchange, Medtronic expects reported revenue growth to range between 6.5% and 6.8%. This outlook is supported by the company’s ongoing efforts to enhance efficiencies in manufacturing and supply chain operations, as well as its commitment to increasing investments in research and development [1].

Medtronic’s leadership expressed optimism about the company’s future prospects, highlighting the anticipated acceleration in revenue growth during the second half of the fiscal year. The company’s strategic focus on innovative product development and market expansion is expected to sustain its competitive edge in the healthcare technology sector. As Medtronic continues to advance its growth drivers and optimize operational efficiencies, it remains committed to delivering long-term shareholder value [1].

The company announced a new Growth Committee to oversee M&A, R&D investments, and potential divestitures, including the planned separation of its Diabetes business. The separation is on track and is expected to be completed within 15 months, with an initial public offering (IPO) route planned for the Diabetes business, which will be renamed MiniMed [2].

Analysts at Needham and Bernstein maintain a positive outlook on Medtronic, raising their price forecasts. Needham has raised its price target to $105, while Bernstein has raised its target to $108. Baird, however, maintains a Neutral rating, with a price target of $93 [3].

Medtronic stock is up 4.07% at $93.56, reflecting investor confidence in the company's strong Q1 results and the positive outlook from analysts [3].

References:
[1] https://tokenist.com/medtronics-q1-fiscal-2026-financial-performance-and-future-guidance/
[2] https://www.drugdeliverybusiness.com/medtronic-diabetes-minimed-separation-on-track/
[3] https://www.gurufocus.com/news/3068615/medtronic-mdt-raises-fullyear-earnings-forecast-following-strong-q1