Medtronic Has Potential To Pursue Further Divestitures: Analyst

Vandana Singh

August 20, 2025

On Tuesday, Medtronic Plc (NYSE:MDT) reported second-quarter earnings and announced key board appointments after Elliott Investment Management became the company's largest shareholder.

The company also unveiled its new Growth Committee, tasked with overseeing the evaluation and execution of strategic M&A, R&D investments, and potential divestitures, including the planned separation of its Diabetes business.

Medtronic reported first-quarter 2026 results, with sales hitting $8.58 billion, surpassing the consensus estimate of $8.38 billion. This marks an 8.4% increase year-over-year, with organic growth of 4.8%. Adjusted earnings of $1.26 per share also beat expectations of $1.23.

Also Read: Medtronic Stock Is Climbing Friday: What's Going On?

The medical devices giant raised sales guidance from $35.15 billion--$35.25 billion to $35.72 billion--$35.82 billion, versus the consensus of $35.32 billion.

Needham Reaction

"We believe that MDT is in the early stages of a strong product cycle and expect Elliott's involvement to help create shareholder value, but we maintain our Hold rating until there are signs that its organic growth is seeing meaningful and sustainable acceleration beyond 5%."

Analyst Mike Matson sees potential for Medtronic to pursue further divestitures/separations and believes that a larger break-up of the company could create shareholder value.

Needham analyst raised fiscal 2026 and 2027 revenue estimates to $35.81 billion from $35.29 billion and to $37.69 billion from $36.96 billion, respectively.

Matson also increased 2026 and 2027 earnings per share estimates to $5.61 from $5.55 and to $6.08 from $5.94, respectively.

Other Analysts

Bernstein maintains Medtronic with an Outperform, raising the price forecast from $97 to $98.

Baird maintains Medtronic with a Neutral, raising the price forecast from $94 to $96.

Price Action: MDT stock is up 4.07% at $93.56 at last check Wednesday.

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