Investing.com -- RBC Capital Markets is feeling bullish about the MedTech sector heading into 2025, noting a robust environment driven by innovation, favorable demographics, and a pro-business policy landscape under the Trump administration.
The firm highlights significant opportunities across its coverage universe, from large-cap leaders to emerging mid-cap innovators.
According to RBC, 2025 will be a "catalyst-rich" year for the sector. Large-cap names like Intuitive Surgical Inc (NASDAQ:ISRG) and Boston Scientific Corp (NYSE:BSX) are poised to deliver a standout performance.
ISRG remains a top pick, with its anticipated mid-year launch of the da Vinci (EPA:SGEF) 5 system representing “a major potential catalyst,” according to RBC analysts.
The company’s leadership in surgical robotics, a high-margin and underpenetrated market, positions it for double-digit revenue and earnings per share (EPS) growth.
Similarly, BSX remains uniquely positioned in the cardiovascular and electrophysiology markets, with strong catalysts expected to unfold, including advancements in pulsed field ablation (PFA) and Watchman devices.
“We see BSX as a premier large-cap company poised to deliver double-digit sales and EPS growth in 2025 that is top-tier in MedTech,” analysts led by Shagun Singh said.
In addition to these industry leaders, analysts also point to opportunities in dislocated large-cap names like DexCom Inc (NASDAQ:DXCM), Medtronic PLC (NYSE:MDT), and Edwards Lifesciences Corp (NYSE:EW).
DXCM, described as “the most dislocated name” in RBC’s large-cap coverage, is poised for a turnaround, driven by innovations such as the 15-day G7 sensor.
Meanwhile, MDT offers compelling relative value as it navigates a business turnaround, with renal denervation (RDN) emerging as a key catalyst.
EW, following a reset in investor expectations, is expected to capitalize on growth in transcatheter valve therapies (TAVR) and new interventional categories.
In the mid-cap space, RBC highlights Inspire Medical Systems Inc (NYSE:INSP) and Globus Medical (NYSE:GMED) as standout names.
INSP is leveraging its first-mover advantage in the obstructive sleep apnea market, with next-generation devices and increasing adoption driving significant upside potential.
GMED, known for its strong execution, is positioned for growth as it integrates Nuvasive and continues to innovate in orthopedic and neurosurgical robotics.
“GMED is a top SMID-cap pick for 2025 as return to historical growth/margin profile aided by best-in-class execution appears poised to drive upside,” analysts said.
Speaking more broadly, RBC notes that sector-wide tailwinds, including aging demographics, a shift to more efficient care settings, and the integration of AI and digital solutions, will underpin long-term growth. The firm emphasizes the impact of innovation, particularly in underpenetrated markets such as robotic-assisted surgery, diabetes care, and vascular interventions.
The Trump administration’s policies are seen as broadly favorable for MedTech, with potential corporate tax reductions and a pro-innovation regulatory stance likely to benefit the sector.
Historically, the RBC Large-Cap MedTech Index has outperformed the broader market by an average of 16% during the first year of new presidential terms.
“Overall, we are bullish on the Medical (TASE:PMCN) Supplies & Devices sector in 2025 and like its relative healthcare positioning, and see factors supporting a multi-year runway ahead,” the investment bank concluded.