MDT Stock Falls Despite Q1 Earnings & Revenue Beat, FY26 EPS View Up

Medtronic plc MDT reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.26, which rose 2.4% from the year-ago quarter’s figure and beat the Zacks Consensus Estimate by 2.4%.

Without certain one-time adjustments — including amortization, restructuring and associated costs, certain litigation charges and acquisition-related costs, among others — GAAP EPS was 81 cents, reflecting a 1.3% improvement from the year-ago quarter’s reported figure.

Following the announcement today, MDT shares fell 3.1% in premarket trading. Medtronic announced the addition of two independent directors and the formation of two special board committees focused on growth and operations. This might have introduced a short-term uncertainty, putting pressure on the company’s share price.

MDT’s Revenues

Worldwide revenues in the reported quarter totaled $8.58 billion, up 8.3% year over year on a reported basis and 4.8% organically. The top line surpassed the Zacks Consensus Estimate by 2.5%.

Segmental Analysis of MDT’s Q1 Revenues

The company reports revenues under four major segments — Cardiovascular, Medical Surgical, Neuroscience and Diabetes.

In the fiscal first quarter, Cardiovascular revenues increased 7% organically to $3.23 billion. Within this, Cardiac Rhythm & Heart Failure sales totaled $1.71 billion, up 9.1% year over year organically. Revenues from Structural Heart & Aortic rose 6.1% organically to $930 million. Coronary & Peripheral Vascular revenues grew 2.9% organically to $643 million.

In the Medical Surgical portfolio, worldwide sales totaled $2.08 billion, up 2.4% year over year organically. While Surgical & Endoscopy revenues edged up 2.3% organically to $1.61 billion, Acute Care & Monitoring revenues increased 2.6% to $471 million.

In Neuroscience, worldwide revenues of $2.42 billion were up 3.1% year over year organically. Cranial & Spinal Technologies sales amounted to $1.21 billion, up 4.5% year over year organically. Specialty Therapies revenues totaled $702 million, down 2.7% year over year organically. Neuromodulation revenues grew 8.6% organically to $504 million.

Revenues in the Diabetes group rose 7.9% organically to $721 million.

MDT’s Q1 Margin Performance

Gross margin in the reported quarter contracted 10 basis points (bps) to 65% due to an 8.7% rise in the cost of revenues.

Research and development expenses rose 7.4% year over year to $726 million. Selling, general and administrative expenses rose 5.7% to $2.81 billion.

Adjusted operating margin expanded 81 bps year over year to 23.8%.

Medtronic’s Fiscal 2026 Outlook

For (full) fiscal 2026, Medtronic still projects organic revenue growth of 5%. The organic revenue growth guidance excludes the impact of foreign currency and revenues related to certain businesses reported as Other. Including Other revenues and the impact of foreign currency exchange, if recent foreign currency exchange rates hold, fiscal 26 revenue growth on a reported basis would now be in the range of 6.5-6.8% (earlier 4.8-5.1%).

Medtronic PLC Price, Consensus and EPS Surprise

Medtronic PLC price-consensus-eps-surprise-chart | Medtronic PLC Quote

The Zacks Consensus Estimate for fiscal 2026 worldwide revenues is pegged at $35.29 billion, implying 5.2% growth from the year-ago reported figure.

Full-year adjusted EPS is now expected to be in the range of $5.60-$5.66 (earlier $5.50-$5.60). The Zacks Consensus Estimate for the year’s adjusted earnings is pegged at $5.55 per share.

Our Take on MDT Stock

Medtronic exited the first quarter of fiscal 2026 with better-than-expected results, wherein both earnings and revenues beat estimates. Cardiac Ablation Solutions revenues increased nearly 50%, including 72% in the United States, on the strength of pulsed field ablation (PFA) products. Additionally, the company received CE Mark for LigaSure RAS vessel-sealing technology on Hugo robotic-assisted surgery (RAS) system.

Meanwhile, the expansion of operating margin and the raised fiscal 2026 EPS guidance in the quarter are highly encouraging.

MDT’s Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, GeneDx Holdings WGS and Boston Scientific BSX.

Medpace Holdings, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2025 EPS of $3.1, which beat the Zacks Consensus Estimate by 3.33%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Revenues of $603.3 million topped the consensus mark by 11.48%. MEDP has a historical five-year earnings growth rate of 30.9% compared with the S&P 500 composite’s 10.1% growth.

GeneDx Holdings, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter 2025 adjusted EPS of 50 cents, exceeding the Zacks Consensus Estimate by a remarkable 400%. Revenues of $102.7 million surpassed the Zacks Consensus Estimate by 21.24%.

WGS has an estimated earnings growth rate of 79.6% for 2026 compared with the industry’s 18.6% growth.

Boston Scientific, currently carrying a Zacks Rank #2, reported a second-quarter 2025 adjusted EPS of 75 cents, which topped the Zacks Consensus Estimate by 4.2%.

BSX has a historical five-year earnings growth rate of 13.3% compared with the industry’s 2.7% growth. 

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This article originally published on Zacks Investment Research (zacks.com).

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