Medtronic Ups 2027 Forecasts Amid Strong Heart Device Demand
Medtronic raises fiscal 2027 forecasts on robust heart device demand, investing in Pi-Cardia and Cornerstone Robotics.
Medtronic has increased its fiscal 2027 revenue growth forecast, citing strong demand for its heart devices used in complex cardiovascular procedures. The company now expects annual organic revenue growth between 7.25% and 7.75%, up from a previous projection of 6.75% to 7.25%. The lower end of its adjusted per share profit forecast has also been raised to $5.94, though the upper limit remains at $6.
Investments in Heart-Valve Repair and Robotics
Alongside its updated forecasts, 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 markets outside the United States. Medtronic CEO Geoff Martha highlighted the potential for growth in robotic surgeries, noting that the penetration of soft tissue robotic surgery in emerging markets 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 growth was largely driven by an 88% increase in its pulsed field ablation portfolio, which is used to treat irregular heart rhythms. Medtronic's quarterly results exceeded expectations, with an adjusted per share profit of $1.45 on revenue of $9.76 billion, surpassing estimates of $1.39 on $9.55 billion in sales, according to LSEG-compiled data.
Strategic Focus on Growth Segments
Medtronic's strategy involves prioritizing high-growth segments within the medical technology industry, particularly those with large patient pools. CEO Geoff Martha emphasized the company's steady pace of mergers and acquisitions, focusing on sectors that not only offer high growth but also cater to significant market segments. This strategic focus is evident in Medtronic's recent investments and its commitment to expanding its presence in emerging markets.