Reasons to Retain Medtronic Stock in Your Portfolio Now

Medtronic plc’s MDT growth in the fiscal second quarter of 2025 is backed by robust international expansion. The company’s continuous efforts to capture several growth markets look impressive. Meanwhile, headwinds from a dull macroeconomic environment and fierce competitive pressure pose a challenge to Medtronic’s operations. In the past year, this Zacks Rank #3 (Hold) company’s shares have risen 9.4% compared with the industry’s 22.8% growth. The S&P 500 composite has witnessed a 31.9% increase in the same time frame.The renowned medical device company has a market capitalization of $110.62 billion. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 1.99%.Let’s delve deeper.Medtronic’s Key UpsidesStrategic Focus to Capture Several Growth Markets: Medtronic has categorized its businesses based on three major growth markets — Established market leaders, Synergistic and Highest Growth. To capture shares within these markets, the company is focusing on several initiatives, which include new product launches, enhanced application of AI across the portfolio, and maintaining pricing while maximizing efficiencies in the operating overhead. In line with this, Medtronic is initiating many new product cycles in markets like diabetes, pulse field ablation, TAVR, neuromodulation, hypertension and robotics. During the fiscal second quarter, the company’s Highest Growth businesses jointly grew 8% and comprised 20% of the company’s consolidated revenues. Established market leaders' businesses made up nearly half of the total revenues and grew mid-single digits year over year. Within Synergistic businesses, neuromodulation was the primary growth driver. The business grew mid-single digits and represented more than 30% of the total revenues.  International Expansion Robust: Medtronic generated nearly 49% of its revenues internationally in the second quarter of fiscal 2025. The company is particularly witnessing broad-based growth worldwide. It is focused on expanding in emerging markets to address the massively unmet and untapped demand for advanced medical technologies. In the reported quarter, emerging markets grew low-double digits.Among recent developments, the Simplera Sync sensor is gaining strong acceptance in international markets. For the Hugo surgical robot, the company is scaling manufacturing production, expanding regulatory approvals and ramping up installations to see continued progress internationally.Medtronic’s Key DownsidesMacroeconomic Issues Hamper Several Market Growth:  Medtronic noted that it is experiencing supply-related disruptions in several of its markets. With regard to procedural volumes, in addition to an incremental China VBP, the company is still seeing lower volumes in elective coronary PCI, GI procedures, TAVR, spinal cord stim and some less emergent surgical procedures. The slower-than-anticipated recovery in procedural volumes was primarily witnessed in developed markets as healthcare systems continue to work through staffing and other challenges. Image Source: Zacks Investment ResearchCompetitive Landscape: The presence of a large number of players has made the medical devices market highly competitive. Medtronic earns the majority of its revenues from the CRDM, Spinal and Cardio Vascular segments. The company faces intense competition in the CRDM segment from players like Boston Scientific Corporation. Johnson & Johnson, Stryker Corporation, Zimmer and NuVasive have intense competition, particularly in the Spinal segment.MDT’s Estimate TrendThe Zacks Consensus Estimate for fiscal 2025 earnings has remained unchanged at $5.46 per share in the past 30 days.The consensus estimate for fiscal 2025 revenues is pegged at $33.56 billion, which indicates a 3.7% increase from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and Penumbra PEN.Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 3.6% compared with the industry’s 19.9% growth in the past year.HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Globus Medical, carrying a Zacks Rank #2 at present, has a long-term estimated growth rate of 14.1%. Shares of the company have rallied 81.8% compared with the industry’s 14.5% growth. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%.Penumbra, carrying a Zacks Rank #2 at present, has an estimated 2024 earnings growth rate of 33.5% compared with the industry’s 15.9%. Shares of Penumbra have risen 3.2% compared with the industry’s 14.5% growth over the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. 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