Medtronic (MDT 0.32%) stock jumped 5.3% through 1:25 p.m. ET Wednesday after it "beat by a penny" on fiscal Q4 2026 earnings this morning, and beat on revenue as well.
Heading into the report, analysts predicted Medtronic would earn $1.54 per share on sales just over $9.6 billion. In fact, earnings were $1.55 per share, and sales reached $9.8 billion.
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Medtronic Q4 earnings
Sales at the Ireland-domiciled medical equipment-maker surged 9.9% year over year, of which 6.6% was organic growth and the rest from acquisitions, leading to the company's "highest annual revenue growth in 10 years." Earnings under generally accepted accounting principles (GAAP) weren't quite as good as the "$1.55" noted above. But at $0.96 per share, earnings still grew 17% -- nearly twice as fast as sales.
For the full year, sales grew 8.4% to $36.4 billion, while earnings were up only 3.3%. So while the full year performance wasn't quite as impressive as the final quarter, growth in both sales and earnings accelerated substantially in that final quarter.
NYSE: MDT
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What's next for Medtronic?
Turning to guidance, Medtronic forecasts about 7% organic sales growth for the coming year, a bit slower than we saw in both Q4 and in the annual result.
Management didn't give GAAP earnings guidance, but noted that non-GAAP profits should range from $5.90 to $6.00 in fiscal 2027, which works out to better than 7% earnings growth at the midpoint. That's twice the income growth the company had in fiscal 2026.
I still have my doubts that Medtronic deserves to trade at more than a 20-times price-to-earnings ratio on only mid-single-digit growth. But at least it is growing. Add a 3.8% dividend yield, and the stock's arguably not too overpriced today.
