Dive Brief:

• Medtronic’s earnings call on Thursday will close out the season for top medtechs and show if the company can match the earlier successes of its rivals for the cardiovascular, neuromodulation and spine markets.
• Wall Street analysts expect Medtronic to extend its run of mid-single-digit growth quarters, reflecting the positive volume trends in its end markets and positive financials from some of its rivals that have already reported.
• The fourth-quarter results will show whether Medtronic expects to maintain that growth rate in its 2025 fiscal year and shed light on the progress of its pulsed field ablation (PFA) launch, a new market that has attracted lots of attention in the past few months.

Dive Insight:

Medtronic’s rivals reported financial results in April and May, revealing the market dynamics that will shape its fourth-quarter earnings. Abbott’s diabetes, neuromodulation and structural heart business grew between roughly 12% and 20% in its first quarter. Medtronic is active in all three areas. Similarly, Medtronic’s orthopedics and spine rivals grew, with sales of Stryker’s device up around 8%.

RBC Capital Markets analysts said in a note to investors that they expect cardiovascular and diabetes to drive growth in the quarter and are awaiting Medtronic updates in both those areas. In diabetes, the analysts want Medtronic to provide an update on the uptake of the MiniMed 780G system with Guardian 4 sensor and the timing of the Simplera sensor’s approval and launch in the U.S.

The analysts also want to know if the transcatheter aortic valve replacement (TAVR) data Medtronic published in April has changed the market. Edwards Lifesciences, a rival in TAVR procedures, and analysts pushed back on the data after it was released, claiming the results are inconsistent with real-world evidence.

Other areas of focus include the timeline for the U.S. launch of Medtronic’s Hugo surgical robot, the net impact of PFA launches on the electrophysiology business and the reimbursement status of the renal denervation device.

The updates could show how Medtronic is faring in fast-growing but competitive markets. 

J.P. Morgan analysts said Medtronic “has exposure to some of medtech’s most exciting end-markets” such as robotics, diabetes and structural heart. However, the analysts questioned whether the company can capitalize on those opportunities, noting that the markets “are also some of the most competitive and are led by pure-play competitors that are far outspending Medtronic.”

The analysts said Medtronic is “in a challenging situation.” The company could provide its businesses “with the funding necessary to operate in these highly competitive markets,” the analysts added, but that would make its earnings targets harder to achieve.

In February, Medtronic reported year-over-year revenue growth of 4.7% to $8.09 billion for its third quarter. The company also announced it would exit the ventilator market and create a new unit with the remaining patient monitoring and respiratory businesses.