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Medtronic PLC MDT

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Medtronic Sees Improvement in Fiscal Third Quarter; No Change to Our Fair Value Estimate

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

Medtronic posted fiscal third-quarter results that slightly exceeded our expectations on the top line and met our bottom-line projections, which has not materially shifted our fair value estimate. The firm remains on track to meet our full-year projections, and we still anticipate further improvement in procedure volume as vaccines are rolled out. Compared with key competitors, Medtronic weathered the latest resurgence of COVID-19 relatively well, supported by the firm’s robust pipeline of new product launches. We saw evidence of Medtronic’s wide economic moat in the quarter, as the firm’s waxing product cycles more than offset those that are waning. For example, the Medtronic’s leadless pacemaker continues to see strong adoption, and we expect this will continue thanks to the Micra AV product, which enlarges the potential patient pool to more than 50% of pacemaker patients. As a result of this product strength, Medtronic’s cardiac rhythm management and heart failure segment outpaced rival Boston Scientific’s CRM business in the latest quarter.

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Company Profile

Business Description

One of the largest medical device companies, Medtronic develops and manufactures therapeutic medical devices for chronic diseases. Its portfolio includes pacemakers, defibrillators, heart valves, stents, insulin pumps, spinal fixation devices, neurovascular products, and surgical tools. The company markets its products to healthcare institutions and physicians in the United States and overseas. Foreign sales account for almost 50% of the company's total sales.

Lower Hatch Street, 20 On Hatch
Dublin, 2, Ireland
T +353 14381700
Sector Healthcare
Industry Medical Devices
Most Recent Earnings Jan 31, 2021
Fiscal Year End Apr 24, 2021
Stock Type
Employees 90,000