Medtronic Raises 2027 Revenue Forecast on Strong Heart Device Demand
Medtronic ups fiscal 2027 forecasts, driven by heart device demand and strategic investments in Pi-Cardia and Cornerstone Robotics.
Medtronic has increased its fiscal 2027 revenue and profit forecasts, buoyed by growing demand for its heart devices used in complex cardiovascular procedures. The medical technology company now anticipates annual organic revenue growth of 7.25% to 7.75%, up from a previous estimate of 6.75% to 7.25%.
CEO Geoff Martha emphasized the broad performance across Medtronic's businesses and contributions from new growth platforms during a recent post-earnings call. The company also adjusted the lower end of its adjusted per share profit forecast for fiscal 2027 to $5.94, while maintaining the upper end at $6.
Strategic Investments Strengthen Position
Medtronic has 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. Martha noted the potential for growth in robotic surgery, particularly in emerging markets where penetration remains under 1%.
The Cornerstone's Sentire device is seen as complementary to Medtronic's own Hugo system, aligning with the company's focus on high-growth segments within the medtech industry.
Cardiovascular Segment Performance
In the latest quarter, Medtronic's cardiovascular segment reported a 19.5% increase in sales, reaching $3.93 billion. This growth was driven by an 88% surge in its pulsed field ablation portfolio, used to treat irregular heart rhythms.
Overall, Medtronic posted an adjusted quarterly per share profit of $1.45 on revenues of $9.76 billion, surpassing analysts' expectations of $1.39 per share on $9.55 billion in sales, according to data compiled by LSEG.
While the company received tariff refunds covering most of the duties paid during the quarter, future refunds have not been factored into their outlook, according to CFO Thierry Pieton. Medtronic's strategic moves and strong market performance underscore its confidence in continuing to capture significant market share in the medtech arena.