Medtronic plc Just Recorded A 13% EPS Beat: Here's What Analysts Are Forecasting Next

Investors in Medtronic plc (NYSE:MDT) had a good week, as its shares rose 3.8% to close at US$105 following the release of its second-quarter results. Revenues were US$9.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.07 were also better than expected, beating analyst predictions by 13%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the most recent consensus for Medtronic from 25 analysts is for revenues of US$36.1b in 2026. If met, it would imply a satisfactory 3.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to swell 17% to US$4.34. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$36.1b and earnings per share (EPS) of US$4.20 in 2026. So the consensus seems to have become somewhat more optimistic on Medtronic's earnings potential following these results.

View our latest analysis for Medtronic

There's been no major changes to the consensus price target of US$110, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Medtronic at US$125 per share, while the most bearish prices it at US$92.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Medtronic's growth to accelerate, with the forecast 7.6% annualised growth to the end of 2026 ranking favourably alongside historical growth of 3.0% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 8.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Medtronic is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Medtronic's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Medtronic going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Medtronic that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.