Medtronic Raises 2027 Forecasts Amid Heart Device Demand Surge
Medtronic ups its fiscal 2027 outlook, driven by robust demand for heart devices and strategic investments.
Medtronic has increased its fiscal 2027 revenue growth and profit forecasts, citing strong demand for its heart devices used in complex cardiovascular procedures. The company now anticipates annual organic revenue growth between 7.25% and 7.75%, an upward revision from the previously projected 6.75% to 7.25%. The lower end of its adjusted per-share profit forecast has also been raised to $5.94, with the upper end remaining at $6.
Strategic Investments and Market Expansion
As part of its growth strategy, Medtronic announced an $80 million investment in heart-valve repair device maker Pi-Cardia, 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. CEO Geoff Martha emphasized the potential for growth in soft tissue robotic surgery, particularly in emerging markets where the penetration is currently less than 1%.
Strong Performance in Cardiovascular Segment
The company's cardiovascular segment reported a 19.5% increase in quarterly sales, reaching $3.93 billion. This surge was largely driven by its pulsed field ablation portfolio, which experienced an 88% growth. This technology is utilized in treating irregular heart rhythms, underscoring the expanding demand for innovative heart solutions.
Financial Highlights and Future Outlook
Medtronic's financial results for the quarter exceeded expectations, with an adjusted per-share profit of $1.45 on revenues of $9.76 billion, surpassing estimates of $1.39 per share on $9.55 billion in sales, according to data compiled by LSEG. CFO Thierry Pieton noted that tariff refunds received during the quarter nearly offset the duties paid, though future refunds have not been factored into the company's outlook.
Looking ahead, Medtronic continues to prioritize segments with high growth potential and large patient pools. "We've had a steady cadence of M&A," said Martha. "We're focusing on high-growth segments of medtech that are expected to become significant."