Medtronic Raises 2027 Forecasts Amid Rising Heart Device Demand
Medtronic boosts fiscal 2027 outlook, driven by strong demand for heart devices and strategic investments.
Medtronic has increased its fiscal 2027 revenue growth projections, citing robust demand for its cardiovascular devices. The company now anticipates annual organic revenue growth of 7.25% to 7.75%, up from its previous forecast of 6.75% to 7.25%. The lower end of its adjusted per share profit forecast has also been raised from $5.90 to $5.94, with the upper limit remaining at $6.
Strategic Investments in Cardiovascular Technology
In a move to bolster its presence in the cardiovascular market, Medtronic announced an $80 million investment in Pi-Cardia, a company specializing in heart-valve repair devices. This investment comes with an option to purchase Pi-Cardia for $210 million. Additionally, Medtronic has invested $700 million in Cornerstone Robotics, securing the rights to distribute a robotic surgical device in selected international markets. CEO Geoff Martha highlighted the potential of these investments, particularly in emerging markets where the penetration of soft tissue robotic surgery remains under 1%.
Performance Across Business Segments
Medtronic's cardiovascular segment reported a 19.5% increase in quarterly sales, reaching $3.93 billion. This growth was largely driven by an 88% rise in sales from its pulsed field ablation portfolio, which is used to treat irregular heart rhythms. The company surpassed analyst expectations with an adjusted quarterly per share profit of $1.45 on revenues of $9.76 billion, compared to estimates of $1.39 per share on $9.55 billion in sales, according to data compiled by LSEG.
Outlook and Market Confidence
CEO Martha expressed confidence in the company's future, emphasizing the broad performance across Medtronic's various business units and the contributions from new growth platforms. He noted that the company has maintained a consistent pace in mergers and acquisitions, focusing on high-growth segments that promise large patient pools.
Financially, Medtronic's CFO Thierry Pieton mentioned that the company received tariff refunds nearly equivalent to the duties paid during the quarter, although future refunds have not been factored into the current outlook.