Why Is Medtronic (MDT) Down 6.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Medtronic (MDT). Shares have lost about 6.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Medtronic due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Medtronic PLC before we dive into how investors and analysts have reacted as of late.

Medtronic's Q1 Earnings & Revenues Top Estimates

Medtronic plc reported first-quarter fiscal 2027 adjusted earnings per share of $1.45 per share, which rose 15.1% year over year and topped the Zacks Consensus Estimate by 4.3%.

The metric excludes certain one-time adjustments, including amortization of intangible assets, restructuring and associated costs, as well as acquisition and divestiture-related items.

On a GAAP basis, earnings per share came in at $1.14, up from 81 cents a year earlier.  

Revenues rose 13.7% year over year to $9.76 billion and beat the consensus mark by 3%. The quarter included an extra fiscal week, which benefited organic growth by approximately $570 million.

MDT’s Segmental Performance Remains Broad-Based

Cardiovascular revenues totaled $3.93 billion in the first quarter of fiscal 2027, up 19.5% year over year on a reported basis and 18.9% organically. Within this, Electrophysiology Therapies revenues rose 29.1%, while Interventional Cardiology Therapies revenues were up 6.5% organically. CardioVascular Surgery and Peripheral Vascular Health revenues advanced 8.1% and 11% respectively, on an organic basis.  

Neuroscience revenues came in at $2.68 billion, up 10.3% reported and 9.3% organically. Cranial & Spinal Technologies led the portfolio with 12.9% organic growth. Specialty Therapies revenues increased 7.4% organically, while Neuromodulation posted 3.3% organic growth.

Medical Surgical revenues were $2.28 billion, up 10% year over year and 10.2% organically. Surgical & Endoscopy revenues increased 9% organically, while Acute Care & Monitoring revenues rose 14.2% organically.

Diabetes revenues jumped 16.9% to $843 million, with organic growth of 14.9%.

MDT Delivers Strong U.S. and Overseas Growth

U.S. revenues rose 16.1% to $4.91 billion, with organic growth of 15.8%. U.S. Cardiovascular was particularly strong, increasing 25.3%, as Electrophysiology Therapies revenues climbed 41.2%.

International revenues advanced 11.4% to $4.85 billion and grew 11.6% organically. International Diabetes recorded 16.8% organic growth, while Cardiovascular increased 13.7%, highlighting strength across major overseas businesses.

MDT’s Q1 Margin Performance

The gross margin in the reported quarter remained flat year over year at 65% despite a 13.8% increase in the cost of products sold, excluding amortization of intangible assets, to $3.42 billion.

Research and development expenses rose 6.2% year over year to $771 million. Selling, general and administrative expenses increased 14% to $3.20 billion.

The adjusted operating margin expanded 10 basis points year over year to 23.7%.

Medtronic Raises Fiscal 2027 Guidance

Medtronic raised its fiscal 2027 organic revenue growth outlook to 7.25%-7.75% from the prior 6.75%-7.25% range.

The company also lifted adjusted EPS guidance to $5.94-$6.00 from the prior $5.90-$6.00 outlook. The guidance incorporates an estimated neutral to 1% accretive foreign currency impact based on recent exchange rates. Medtronic also highlighted recent acquisitions of Scientia Vascular and SPR Therapeutics and continued investment in growth platforms.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Medtronic has a average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Medtronic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Medtronic is part of the Zacks Medical - Products industry. Over the past month, Agilent Technologies (A), a stock from the same industry, has gained 13.8%. The company reported its results for the quarter ended July 2026 more than a month ago.

Agilent reported revenues of $1.88 billion in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $1.62 for the same period compares with $1.37 a year ago.

Agilent is expected to post earnings of $1.72 per share for the current quarter, representing a year-over-year change of +8.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Agilent. Also, the stock has a VGM Score of F.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research