Medtronic Raises Fiscal 2027 Forecast Amid Heart Device Surge

Medtronic has revised its fiscal 2027 revenue growth outlook upwards, driven by robust demand for its heart devices utilized in complex cardiovascular procedures. The company announced on Tuesday that it anticipates annual organic revenue growth to range between 7.25% and 7.75%, an increase from the previous forecast of 6.75% to 7.25%.

Strong Performance Across Sectors

During a post-earnings call, CEO Geoff Martha emphasized the company's confidence in its growth, citing not only strong quarterly results but also the broad performance across various business units. The increasing contributions from newer growth platforms have bolstered Medtronic's financial projections.

Medtronic has also adjusted the lower end of its fiscal 2027 adjusted per share profit forecast to $5.94, up from $5.90, while maintaining the upper end at $6. The company's finance chief, Thierry Pieton, noted that recent tariff refunds have nearly offset the duties paid during the quarter, although future refunds have not been factored into the current outlook.

Strategic Investments and Acquisitions

The company is making significant investments to strengthen its market position. Medtronic plans to invest $80 million in Pi-Cardia, a heart-valve repair device manufacturer, with an option to purchase the company for $210 million. Additionally, a $700 million investment in Cornerstone Robotics will enable Medtronic to distribute a robotic surgical device in select markets outside the United States.

Martha highlighted the low penetration of soft tissue robotic surgery in emerging markets, stating that Cornerstone's Sentire device complements Medtronic's existing Hugo surgical system. He reiterated the company's strategy of targeting high-growth segments within medtech that cater to large patient populations.

Quarterly Financial Performance

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 its pulsed field ablation portfolio, used for treating irregular heart rhythms. Overall, the company posted an adjusted quarterly per share profit of $1.45 on revenue of $9.76 billion, surpassing analyst estimates of $1.39 per share on $9.55 billion in sales, according to LSEG-compiled data.