Medtronic is heading into its next earnings report with one of its fastest-growing businesses still showing little sign of slowing, and Bank of America sees another solid quarter ahead.
The medical-device maker finished fiscal 2026 with $9.8 billion in fourth-quarter revenue, up 6.6% organically. Cardiac Ablation Solutions, or CAS, stood out with 78% global revenue growth and 124% growth in the U.S., while the company said it gained another eight percentage points of U.S. market share.
Medtronic (MDT) will report fiscal first-quarter results on Sept. 1, giving investors their next look at whether that momentum can continue. The quarter ended July 31.
Bank of America sees room for Medtronic to beat
Bank of America analyst Travis Steed maintained a Buy rating and $95 price objective on Medtronic, according to a research note shared with TheStreet, arguing the company should take another step in the right direction when it reports fiscal first-quarter results.
The $95 target represented 4.1% upside from the $91.27 share price listed in the note as of Aug. 17.
Medtronic guided for organic revenue growth of 6% to 6.5% in the quarter, excluding the benefit of an extra selling week. Management expects that extra week to add roughly 500 to 600 basis points to reported growth.
Steed thinks the setup looks favorable. Healthy procedure utilization and another strong quarter from CAS could help Medtronic land near the upper end of its range, while Bank of America’s comparison-adjusted math points to roughly 30 to 50 basis points of potential revenue upside.
The bigger issue for investors is how long CAS can continue carrying so much of Medtronic’s growth.
Cardiac ablation remains Medtronic’s biggest swing factor
Bank of America expects CAS growth in the fiscal first quarter to remain similar to the 78% growth rate posted last quarter, including the extra week. Wall Street is modeling about 69% growth, according to the note.
That gap supports Steed’s near-term optimism, although the longer-term outlook becomes more complicated. Bank of America estimates CAS is currently adding about three percentage points to Medtronic’s total growth, making an eventual slowdown difficult to ignore.
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Wall Street’s fiscal 2027 CAS estimates may also be too high. The Street is modeling quarterly growth of roughly 69%, 47%, 30%, and 22%, or about 42% on average.
Medtronic’s own comments point to a mid-to-high-teens underlying market and CAS growth of more than twice that rate.
Using a 17% market-growth assumption and a 2.1-times growth multiple, Bank of America arrives at about 36% CAS growth for the year. That would still contribute roughly 1.7 percentage points to total Medtronic growth, down from about 2.2 points in fiscal 2026.
Steed’s argument is that the slowdown may be pushed further out than investors expect. That would give Medtronic’s other businesses and product pipeline more time to support growth around 6% or better.
Medtronic has more catalysts beyond CAS
The pending separation of MiniMed could provide another catalyst. MiniMed completed its IPO in March, with Medtronic retaining roughly 90% ownership after the offering. The transaction remains part of the broader plan to separate the diabetes business into an independent public company.
Bank of America believes an October separation could be neutral to slightly accretive to Medtronic earnings per share after accounting for lost diabetes earnings, lower corporate costs, and potential share retirement.
Renal denervation is another area to watch. Medicare now covers FDA-authorized renal denervation for uncontrolled hypertension under Coverage with Evidence Development when patients meet specified criteria, improving the reimbursement backdrop for the market.
Steed also sees a potential September catalyst if renal denervation receives a Category 1 CPT code. The combination of reimbursement progress, improving procedure volumes, and an annualized revenue base of about $100 million gives Bank of America more confidence than it had when a prior code request was rejected.
For now, the near-term Medtronic story still comes back to cardiac ablation. Bank of America expects the growth engine to stay strong enough to support another good quarter, while buying Medtronic more time to prove the rest of its portfolio can keep the momentum going.
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