Medtronic targets rise after Q1 beat and outlook hike

Medtronic drew a broad round of price-target increases from Wall Street analysts following its fiscal 2027 first-quarter results. The medical device maker posted 13.7% organic revenue growth, supported by an extra fiscal week that contributed about $570 million to sales. Following the performance, management raised its fiscal 2027 organic revenue growth outlook to a range of 7.25% to 7.75%, up from 6.75% to 7.25%.

Growth was led by Cardiac Ablation Solutions, where revenue jumped 88%. Management expects the CAS unit to grow more than 2.5 times its market in fiscal 2027. Meanwhile, cardiac rhythm management (CRM), Pelvic Health, and diabetes each recorded 15% growth, while broader cardiovascular products expanded roughly 7% organically.

Several brokerage firms raised their valuation targets. Mizuho lifted its target to $115 from $100 with an Outperform rating, analyst Anthony Petrone citing broad cardiovascular momentum. BofA raised its target to $110 from $95 with a Buy rating, and Wells Fargo moved its target to $104 from $102 with an Overweight rating. Cautious firms also raised targets while keeping neutral stances: Truist moved to $99 from $86, Stifel lifted to $95 from $80, and Deutsche Bank raised to $92 from $78. Baird increased its target to $100 from $91 with a Neutral rating, questioning valuation multiples, while BTIG raised to $100 from $91 with a Buy rating despite questioning the durability of the Hugo surgical system after Medtronic made a $700 million investment in Cornerstone Robotics.

Institutional investors expanded positions in the second quarter. First Eagle Investment Management grew its stake by 38% to 13.78 million shares, Arrowstreet Capital increased holdings by 177% to 12.89 million, Citadel added 447% to 5.37 million, D.E. Shaw boosted its stake by 392% to 4.40 million, and AQR increased its position by 103% to 3.30 million. Short interest fell 33% from a month earlier to 12.13 million shares as of August 31, representing 0.95% of shares outstanding with a 1.74-day short ratio. As of September 22, the stock traded at a forward price-to-earnings ratio of 15.1 ahead of its Investor Day on December 10 and 11.