Medtronic Raises 2027 Forecast Amid Growing Heart Device Demand
Medtronic increases 2027 revenue and profit forecasts, driven by robust demand for heart devices.
Medtronic has raised its fiscal 2027 revenue growth outlook and adjusted profit forecasts, citing strong demand for its heart devices, especially those used in complex cardiovascular procedures. This strategic move comes as the company experiences a surge in the adoption of newer medical technologies and a steady demand for surgeries.
Financial Forecasts and Strategic Investments
The medical device giant now expects its annual organic revenue to grow between 7.25% and 7.75%, up from its previous projection of 6.75% to 7.25%. Medtronic has also increased the lower end of its fiscal 2027 adjusted per share profit forecast to $5.94 from $5.90, while maintaining the upper limit at $6.
CEO Geoff Martha expressed confidence in the company's performance across various business segments and highlighted contributions from newer growth platforms. In a bid to strengthen its portfolio, Medtronic announced an $80 million investment in Pi-Cardia, a heart-valve repair device maker, with an option to acquire the company for $210 million. Additionally, Medtronic has invested $700 million in Cornerstone Robotics, securing rights to distribute a robotic surgical device in select international markets.
Growth in Cardiovascular Segment
Medtronic's cardiovascular segment reported a significant 19.5% increase in quarterly sales, reaching $3.93 billion. This growth was largely driven by its pulsed field ablation portfolio, which saw an 88% surge. The technology is used to treat irregular heart rhythms, demonstrating the high demand for innovative cardiac solutions.
During a post-earnings call, Martha noted the low penetration of soft tissue robotic surgery in emerging markets, describing Cornerstone's Sentire device as complementary to Medtronic's existing Hugo system. The company is focusing on high-growth segments within the medtech industry that cater to large patient pools.
Quarterly Performance and Market Response
For the quarter, Medtronic reported an adjusted per share profit of $1.45 on revenue of $9.76 billion, outperforming analysts' expectations of $1.39 per share on $9.55 billion in sales, according to data compiled by LSEG.
Medtronic's Chief Financial Officer, Thierry Pieton, mentioned that the company received tariff refunds that almost covered the duties paid during the quarter. However, future refunds have not been factored into the company's outlook.
The strategic investments and robust financial performance underline Medtronic's commitment to capitalizing on emerging opportunities within the healthcare technology sector, positioning the company for continued growth in the coming years.