Medtronic Stock (MDT) Approaching Resistance Into Earnings – What Next?

Medtronic's stock (NYSE: MDT) is currently trading at $93.13 in the pre-market, up $0.13+(0.14%) from the previous session. This latest uptick contributes to a year-to-date gain of approximately 15.96%, signalling strong market confidence ahead of the company's fiscal Q2 earnings release scheduled for tomorrow.

Analysts expect Medtronic (MDT) to deliver stable earnings for the quarter, with an estimated EPS of $1.23, matching the figure from the same quarter last year. Revenue is projected to grow modestly to $8.37 billion, up 5.76% from $7.92 billion a year ago. The forecast suggests steady performance, with moderate top-line growth driven by consistent demand across its medical device segments.

Looking back to previous reports for clues, Q4 24 results were underpinned by solid performance across its various segments. The Cardiovascular segment led the charge with $3.34 billion in revenue, particularly boosted by a nearly 30% increase in Cardiac Ablation Solutions. The Neuroscience segment contributed $2.62 billion, driven by high-single-digit growth in Cranial & Spinal Technologies. Medical Surgical reported $2.21 billion in revenue, with mid-single-digit organic growth in Surgical & Endoscopy. The Diabetes segment also shone, achieving $728 million in revenue, a 10.4% increase, fueled by the growing adoption of the MiniMed™ 780G system.

Furthermore, Medtronic's commitment to returning value to shareholders is evident in the recent dividend increase approved by the Board of Directors. The quarterly cash dividend was raised to $0.71 per share, translating to an annual dividend of $2.84 per share. This marks the 48th consecutive year of dividend increases, a testament to the company's financial stability and consistent performance.

Q1 of 2025 was also strong, with a mild EPS beat ($1.62 vs $1.58) coming on revenue of $8.93B.

Looking ahead, Medtronic has provided guidance for fiscal year 2026, anticipating approximately 5% organic revenue growth and diluted non-GAAP EPS growth of approximately 4%, with projections ranging between $5.50 and $5.60. These projections, coupled with the planned separation of the Diabetes business into a standalone public company, signal a strategic focus on high-margin growth areas. The separation, expected to be executed through capital markets transactions, preferably via an initial public offering (IPO) and subsequent split-off, could unlock significant value for shareholders.

However, despite the positive outlook, Medtronic's stock has underperformed the S&P 500 Index over the past 52 weeks, appreciating by approximately 9.6% compared to the index's 15% gain. This underperformance raises questions about whether Medtronic can sustain its current momentum and close the gap with the broader market.

With resistance looming large at $95, and earnings on deck, volatility could be expected. Careful risk management would be the words of the day here.