Why Is Medtronic (MDT) Up 1.5% Since Last Earnings Report?

It has been about a month since the last earnings report for Medtronic (MDT). Shares have added about 1.5% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Medtronic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.Medtronic's Q4 Earnings & Revenues Top EstimatesMedtronic plc posted fourth-quarter fiscal 2026 adjusted earnings of $1.55 per share, down 4.3% from the year-ago quarter but above the Zacks Consensus Estimate by 0.6%.For the full-year fiscal 2026, adjusted earnings per share was $5.53, up 0.7% year over year. The figure missed the Zacks Consensus Estimate by 0.2%.Revenue rose 9.9% year over year to $9.81 billion and beat the consensus by 1.5%. The upside came as procedure-driven demand stayed firm across key franchises. Cardiac Ablation Solutions revenue surged 78% globally, including 124% growth in the United States, while multiple portfolios delivered healthy gains.Full-year worldwide revenues totaled $36.4 billion, up 8.4% year over year. The top line marginally surpassed the Zacks Consensus Estimate by 0.6%.MDT’s Portfolio Mix Tilted Toward CardiovascularCardiovascular generated $3.80 billion in the quarter, underscoring the importance of the company’s largest portfolio to overall momentum. Neuroscience contributed $2.75 billion, and Medical Surgical added $2.39 billion, reflecting steady demand across hospital-based therapy areas.Diabetes produced $837 million of revenue and remained a meaningful growth lever alongside the broader portfolios. The mix shows Medtronic’s exposure to both large, recurring procedural categories and faster-moving product cycles in areas like diabetes management.MDT’s Geographic Split Favored International GrowthU.S. revenue increased 7.1% year over year to $4.87 billion, supported by gains across major portfolios and continued procedure volume resilience.International revenue advanced 12.8% to $4.94 billion. The overseas outperformance was broad-based and included a notable lift in Diabetes internationally, reinforcing how global scale can amplify Medtronic’s reported results when demand is healthy.Medtronic’s Adjusted Margins Mixed in the QuarterOn an adjusted basis, Medtronic posted gross margin of 65.4% in fourth-quarter fiscal 2026, up 30 basis points year over year, reflecting a modest improvement in profitability at the product level.However, operating leverage moved the other way. The adjusted operating margin fell to 25.5%, down 230 basis points from the prior-year quarter, as the company absorbed notable headwinds, including margin impacts tied to the MiniMed Blackstone payment and tariffs.Medtronic’s Cash Generation Supports Returns and InvestmentOperating cash flow totaled $7.33 billion in fiscal 2026, providing the financial flexibility to fund both portfolio investment and shareholder distributions. Free cash flow was $5.43 billion for the year, equal to 76% free cash flow conversion from adjusted net earnings.Medtronic also returned $4.2 billion to shareholders in fiscal 2026 and ended the year with $9.2 billion in cash and investments.Medtronic’s FY27 Guidance and Shareholder ReturnsLooking ahead, the company guided for fiscal 2027 organic revenue growth of 6.75% to 7.25% and adjusted earnings of $5.90 to $6.00 per share. The outlook bakes in the benefit of a 53rd week, additional M&A and a full-year contribution from the Diabetes business, while also considering tariffs, interest and tax expense. The Zacks Consensus Estimate projects fiscal 2027 revenues of $38.39 billion, up 6.1% from fiscal 2026 levels, while earnings per share is expected to rise 9.7% to $6.08.Medtronic also increased its quarterly dividend to $0.72 per share, implying an annual rate of $2.88 and marking its 49th consecutive year of dividend increases.How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates revision.VGM ScoresCurrently, Medtronic has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Medtronic has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks