Medtronic stock dips despite earnings beat as Truist Securities maintains Hold

Investing.com - Medtronic , Inc. (NYSE:MDT) shares declined 3-4% in pre-market trading despite reporting quarterly earnings that slightly exceeded analyst expectations, as organic revenue growth fell short of investor hopes. The medical device giant, with a market capitalization of $118.7 billion, has shown resilient financial health, earning a "GOOD" rating from InvestingPro’s comprehensive analysis.

The medical device maker posted earnings per share of $1.26, beating consensus estimates of $1.23, with the outperformance attributed to favorable foreign exchange impacts and non-operational items worth approximately $0.02 per share. Medtronic achieved 4.8% organic revenue growth, which was roughly in line with consensus estimates of 4.9%. The company maintains strong profitability with a 65.4% gross margin and has generated $5.2 billion in levered free cash flow over the last twelve months.

Medtronic raised its full-year earnings guidance to $5.60-5.66 per share, up from its previous forecast of $5.50-5.60, citing a reduced tariff impact of $185 million compared to the earlier projected range of $200-350 million. The company’s Cardiovascular segment showed strong performance with 7.0% organic growth, with its ablation business growing nearly 50%. InvestingPro data reveals the company has maintained dividend payments for 49 consecutive years, with a current yield of 3.1%. Get access to 8 more exclusive ProTips and detailed valuation metrics with an InvestingPro subscription.

Truist Securities maintained its Hold rating and $92.00 price target on Medtronic stock, noting that while mid-single-digit organic growth was positive, buy-side investors had expected growth exceeding 5.5% versus the 4.8% delivered. This expectation gap likely contributed to the stock’s decline following recent gains ahead of the earnings report. The stock currently trades at a PEG ratio of 0.83, suggesting potential value relative to its growth prospects. Access the comprehensive Pro Research Report, available for Medtronic and 1,400+ other top US stocks, exclusively on InvestingPro.

Medtronic also announced two new board appointments and the creation of two new committees focused on growth and operations, following discussions with Elliott Investment Management, which recently increased its stake in the company significantly.

In other recent news, Medtronic reported its first-quarter fiscal 2026 earnings, revealing mixed results. While the company’s revenue exceeded consensus estimates by approximately 2%, its organic sales growth of 4.8% fell short of buy-side expectations, which were above 5.5%. Despite this, Medtronic’s earnings beat both Goldman Sachs’ estimates and consensus expectations on a reported basis. Analysts have expressed varied opinions about the company’s prospects. Morgan Stanley reiterated an Overweight rating with a $107 price target, while Leerink Partners maintained an Outperform rating with a $110 price target, citing ongoing discussions with activist investor Elliott Management. On the other hand, Goldman Sachs reiterated a Sell rating with a $78 price target, pointing to slower organic revenue growth. Stifel and Raymond James maintained their Hold and Market Perform ratings, respectively, emphasizing the company’s slight outperformance in earnings and revenue. These developments highlight differing analyst perspectives on Medtronic’s financial health and strategic direction.

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