Results: Medtronic plc Beat Earnings Expectations And Analysts Now Have New Forecasts

Investors in Medtronic plc (NYSE:MDT) had a good week, as its shares rose 2.7% to close at US$85.90 following the release of its quarterly results. Medtronic reported US$8.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.99 beat expectations, being 9.9% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Medtronic

After the latest results, the 30 analysts covering Medtronic are now predicting revenues of US$33.6b in 2025. If met, this would reflect a reasonable 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 26% to US$3.97. In the lead-up to this report, the analysts had been modelling revenues of US$33.5b and earnings per share (EPS) of US$3.90 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$93.68, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Medtronic at US$112 per share, while the most bearish prices it at US$75.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Medtronic's rate of growth is expected to accelerate meaningfully, with the forecast 3.1% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 7.9% annually. So it's clear that despite the acceleration in growth, Medtronic is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Medtronic's revenue is expected to perform worse than 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 estimates - from multiple Medtronic analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Medtronic's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.