Medtronic Raises 2027 Forecasts Amid Rising Heart Device Demand
Medtronic boosts its fiscal 2027 outlook on strong heart device demand and strategic investments in medtech.
Medtronic has revised its fiscal 2027 revenue growth and profit forecasts upwards, driven by increased demand for its heart devices used in complex cardiovascular procedures. This adjustment reflects the company's confidence in its diverse performance across various business segments and its commitment to leveraging new growth platforms.
Strategic Investments and Partnerships
The medical device giant announced an $80 million investment in Pi-Cardia, a company specializing in heart-valve repair devices, with an option to acquire it for $210 million. Furthermore, Medtronic has invested $700 million in Cornerstone Robotics, securing rights to distribute a robotic surgical device in selected markets outside the United States. This strategic move aims to enhance Medtronic's capabilities in the emerging field of soft tissue robotic surgery, which currently has less than 1% penetration in emerging markets.
Medtronic CEO Geoff Martha emphasized the importance of prioritizing high-growth segments within the medtech industry, highlighting the potential of these investments to capture large patient pools and significant market segments.
Financial Performance and Market Outlook
The company has increased the lower end of its adjusted per-share profit forecast for fiscal 2027 from $5.90 to $5.94, while maintaining the upper limit at $6. Annual organic revenue growth expectations have also been raised to a range of 7.25% to 7.75%, up from the previous forecast of 6.75% to 7.25%.
Thierry Pieton, Medtronic's Chief Financial Officer, noted that the company received tariff refunds that nearly offset the duties paid in the last quarter, although these refunds have not been factored into future projections.
Medtronic's cardiovascular segment reported a 19.5% increase in quarterly sales, reaching $3.93 billion. This growth was primarily fueled by the company's pulsed field ablation portfolio, which experienced an 88% surge. The company's adjusted quarterly earnings per share stood at $1.45 on revenues of $9.76 billion, surpassing analysts' expectations of $1.39 per share on $9.55 billion in sales, according to LSEG data.