Medtronic's stock experienced a significant uplift, breaking out following an exceptional earnings report primarily propelled by its innovative pulsed field ablation technology. This medical advancement, designed to address abnormal heart rhythms, demonstrated remarkable sales growth, positioning the company for a strong financial trajectory.
The Ireland-based medical technology firm reported an astounding year-over-year sales increase exceeding 300% for its pulsed field ablation (PFA) technology across both U.S. and international markets. This robust performance is a key driver in the company's projection of achieving an additional $1 billion in revenue since the beginning of fiscal year 2025, as highlighted by Evercore ISI analyst Vijay Kumar. These impressive figures were detailed in Medtronic's second-quarter fiscal year 2026 results.
Analyst Kumar described the earnings as a "clean Organic Beat," with the electrophysiology sector, specifically PFA, being the primary catalyst. In early trading sessions, Medtronic shares climbed over 5% to reach 101.52, successfully breaking past a flat base with a buy point at 99.37, according to MarketSurge data.
Across its diverse product portfolio, Medtronic achieved adjusted earnings of $1.36 per share on revenues of $8.96 billion. Sales saw a 6.6% increase on a reported basis, while organic sales grew by 5.5%. Earnings also advanced by 8%, with both sales and earnings surpassing Medtronic's own guidance. The company proudly announced its strongest cardiovascular revenue growth in over a decade, excluding the pandemic period. Cardiac ablation solutions revenue alone surged by 71%, with PFA in the U.S. contributing a significant 128% to this growth. Medtronic competes in the PFA market with rivals like Boston Scientific.
While other divisions exhibited more modest but steady growth, neuroscience sales increased by 3.9% organically, aligning with market expectations. Medical surgical sales also met forecasts, rising by 1.3% organically. Based on these strong results, Medtronic revised its annual outlook, now anticipating 5.5% sales growth, an increase from its previous 5% projection. The company also adjusted its adjusted earnings per share forecast to between $5.62 and $5.66, elevating the lower end of its previous estimate by two cents. This revised outlook stands favorably against the Street's projections of $5.62 per share earnings and approximately 7% sales growth to $35.84 billion.
Looking ahead, Medtronic has plans to introduce a renal denervation system, aimed at treating high blood pressure, and a tibial neuromodulation therapy for pain management, in the latter half of its fiscal year. The company is also awaiting FDA approval for its Hugo surgical robot. Kumar expressed strong optimism about Medtronic's future, assigning an outperform rating with a price target of 107. The company's strategic advancements and robust financial performance indicate a promising outlook in the competitive medtech landscape.