Piper Sandler has maintained its Overweight rating and a $90.00 price target for shares of Medtronic Inc. (NYSE: NYSE:MDT) following the company's first-quarter results.
Medtronic's organic revenue growth and earnings per share (EPS) exceeded Wall Street's forecasts, leading to a slight increase in its fiscal year 2025 (FY'25) guidance for both revenue and earnings.
The company reported progress in several revenue growth programs but indicated that these are not expected to significantly affect near-term revenue. The analyst noted that Medtronic's diabetes sector is showing signs of improvement since the launch of its 780G system, although challenges are anticipated ahead.
Despite the positive aspects, Piper Sandler expressed caution regarding several of Medtronic's upcoming product launches, including Symplicity, Hugo, and Affera. The firm believes that while Medtronic is achieving cost efficiencies, the margin increase projected for the second half of FY'25 appears ambitious.
In other recent news, Medtronic reported a 5.3% increase in revenue for the first quarter of fiscal 2025, exceeding expectations with an 8% growth in its highest-grossing businesses. The positive financial performance led to an increase in full-year revenue and EPS guidance.
Analysts from various firms offered differing perspectives on these developments. Goldman Sachs (NYSE:GS) maintained its Sell rating on Medtronic, citing continuous growth in operating expenses and uncertainties in other operating income and expenses.
Conversely, Oppenheimer increased Medtronic's price target to $94 while maintaining a Perform rating, highlighting the company's improved FY25 guidance and potential growth drivers like the PulseSelect product and the anticipated FDA approval of Affera.
Mizuho also raised Medtronic's price target to $98, maintaining an Outperform rating, and emphasizing the company's strong performance in its cardiovascular and diabetes sectors.
However, Baird analyst raised the price target to $90 but maintained a Neutral rating, expressing caution until clearer visibility on margin stabilization and a resurgence in EPS growth. Lastly, despite the company's robust first-quarter revenue performance, Wells Fargo (NYSE:WFC) maintained its Overweight rating and slightly increased the price target to $106.
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