- Price
- $94.75
- Fair value
- $112.00
- Discount
- 15.4%
- Uncertainty
- Medium
- LSEG rating
- 2.07
- Moat
- Narrow
- Next earnings
- 2026-12-01
- Next earnings is estimate
- Yes
- Company name
- Medtronic
- Sector
- Medical devices
- About
- Medtronic is one of the largest medical device companies in the world. It is based in Galway, Ireland, and has more than 95,000 employees in more than 150 countries. Its Cardiovascular portfolio makes pacemakers, defibrillators, cardiac ablation systems such as Affera, heart valves and vascular products. Its Neuroscience portfolio makes products for the spine, the brain, pain and pelvic health. Its Medical Surgical portfolio makes surgical tools, robotic surgery systems and patient monitoring products. Medtronic separated its diabetes business into MiniMed Group, which sold shares to the public on March 9, 2026. In October 2026, Medtronic exchanged all of its remaining MiniMed shares for its own shares.
- Thesis
- The market prices Medtronic as a large company that grows slowly, and investors doubt that its new products can keep growth high for a long time. In Q1 fiscal 2027, organic revenue grew 13.7%, but an extra fiscal week added about $570 million, so the underlying growth was lower. The separation of MiniMed also adds restructuring charges of $300 million to $500 million. For the gap to close, three things must be true. Medtronic must reach its raised fiscal 2027 guidance of 7.25% to 7.75% organic revenue growth and non-GAAP EPS of $5.94 to $6.00. Cardiac ablation, which grew 88% in Q1, and other new platforms must keep strong growth without the extra week. The separation of MiniMed must leave few stranded costs with Medtronic. The Q2 fiscal 2027 report, expected in late November or early December 2026, and the Q3 report in February 2027 give the next evidence. If these checks pass, the gap can close over the next two to four quarters. The main reason it may not close is that growth falls back to the old low rate after the extra week and the first strong year of cardiac ablation.
- Risks
- Q1 fiscal 2027 growth included an extra fiscal week worth about $570 million. Growth in the next quarters will look lower, and the market may doubt the raised guidance.
Cardiac ablation is a fast-growing market with strong competitors. If Medtronic loses share, or prices fall, a main source of growth becomes smaller.
The separation of MiniMed adds restructuring charges of about $300 million to $500 million and transition services. Costs that stay with Medtronic after the separation can lower margins.
Medical devices need regulatory approvals. A delay in an approval, a recall or a change in payment rules can lower sales of a product.
- Balance sheet
- Cash: $1.7B
Debt: $28.2B
Net debt: $26.5B
Interest cover: 9.5×
Debt due within 12 months: $2.5B
At July 31, 2026, debt was $28.15 billion: long-term debt of $25.62 billion and current debt obligations of $2.54 billion, which include $450 million of commercial paper. Cash was $1.69 billion, and investments were $7.13 billion more. Interest cover is operating profit divided by net interest expense for Q1 fiscal 2027. Medtronic has a $3.5 billion five-year unsecured revolving credit facility, which backs its commercial paper programs. In October 2026, it used its remaining MiniMed shares to take back about 55.0 million of its own shares, without cash.
As of 2026-07-31.
- Checkpoints
- Dec 1, 2026 (estimate): Q2 fiscal 2027 earnings: growth without the extra week. Pending. Watch: Organic growth near the 7.25% to 7.75% guidance and the EPS guidance kept or raised pass; a cut to the guidance fails.
Feb 2027 (estimate): Q3 fiscal 2027 earnings: cardiac ablation. Pending. Watch: Continued strong growth in cardiac ablation and stable margins after the MiniMed separation pass; slower ablation growth or higher stranded costs fail.
- Recent events
- 2026-10-14: Medtronic announced the final results of the MiniMed exchange offer. Holders tendered about 297.5 million Medtronic shares, so the offer was oversubscribed. Medtronic exchanged all of its remaining 252.8 million MiniMed shares for 55.0 million Medtronic shares, and it no longer owns MiniMed shares.
2026-09-14: Medtronic started an offer to exchange shares of MiniMed Group for outstanding Medtronic shares, to complete the separation of its diabetes business.
2026-09-01: Medtronic reported Q1 fiscal 2027 results. Revenue was $9.76 billion, up 13.7% organic, with about $570 million from an extra fiscal week. Cardiovascular grew 18.9%, and cardiac ablation grew 88%. Non-GAAP EPS was $1.45. Medtronic raised its fiscal 2027 guidance to organic revenue growth of 7.25% to 7.75% and non-GAAP EPS of $5.94 to $6.00.
2026-07-16: Medtronic completed the acquisition of SPR Therapeutics. It had completed the acquisition of Scientia Vascular on June 12, 2026.
2026-03-09: MiniMed Group, Medtronic's diabetes business, completed its initial public offering. Medtronic kept a controlling stake until the exchange offer in October 2026.