Medtronic (MDT) Stock Forecast & Price Target

Medtronic's stock outlook is bolstered by the continued growth in its neuromodulation market share, with the company gaining 240 basis points and demonstrating mid-single-digit revenue growth driven by the adoption of its MiniMed 780G AID system. The company anticipates FY25 revenue growth of 3.4-3.8%, alongside a notable EPS guidance of $5.44-5.50, representing a year-over-year increase of 10-11% excluding foreign exchange impacts. Additionally, Medtronic's non-GAAP gross margin rose by 50 basis points year-over-year, combined with a significant 100 basis point improvement in its non-GAAP operating margin, indicating solid operational performance amid favorable currency effects.

Medtronic is facing significant headwinds, with revenue growth projected to slow to low-single digits due to ineffective new product launches and erosion of market share in key categories, contributing to below-consensus earnings expectations. The company's operating margin is anticipated to remain flat or decline, exacerbated by various risks including increased competition, disappointing sales from new offerings, and unfavorable foreign exchange impacts that could further strain profitability. Additionally, research and development expenses have decreased slightly, while selling, general, and administrative costs have risen, indicating potential inefficiencies in cost management amid these financial pressures.