Medtronic Posts a Blowout Quarter as Revenue Outperforms, Bumps up Dividend

Medtronic plc (MDT) posted wider-than-expected fiscal Q4 results driven by top-line growth. The medical device company also increased its quarterly cash dividend.

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The company reported that Q4 adjusted earnings more than doubled to $1.50 per share on a year-over-year basis, coming in well ahead of analysts’ expectations of $1.42 per share. Adjusted revenue surged 32% to $8.19 billion.

U.S. revenue was $4.2 billion, up 47% year-over-year. Additionally, Non-U.S. developed market adjusted revenue grew 11% to $2.7 billion, while Emerging Markets adjusted revenue came in at $1.3 billion, up 41%. (See Medtronic stock analysis on TipRanks)

For Fiscal Year 2022, the company anticipates total revenue to represent year-over-year organic growth of 9%. Moreover, the non-GAAP earnings guidance range stands at $5.60-$5.75 per share, versus analysts’ expectations of $5.72.

Medtronic’s CFO Karen Parkhill commented, “Our fiscal 2022 revenue guidance that we are issuing for the first time today is about a point higher than Street estimates, as we anticipate strong organic revenue growth driven by new product launches and end market recovery from the impact of the pandemic. At the same time, we’re investing at the front end of major product launches, including surgical robotics and renal denervation, to fully realize their potential. We’re also planning for the largest increase in R&D spend in our company’s history, as we invest to accelerate long-term growth and capitalize on a long list of opportunities.”

Additionally, Medtronic declared an increased quarterly cash dividend of $0.63 per share, up 9% from the prior payout. This marks the company’s 44th consecutive year of dividend increases. The new dividend will be paid on July 16, to shareholders of record as of June 25. The company’s annual dividend of $2.52 per share now reflects a dividend yield of 2%.

On May 21, Morgan Stanley analyst David Lewis reiterated a Buy rating and a price target of $140 (10.4% upside potential) on MDT stock with the expectation of organic growth of 33%-34% in the fourth quarter.

Consensus among analysts is a Strong Buy based on 9 Buys versus 1 Hold. The average analyst price target stands at $138.89 and implies upside potential of 10% to current levels. Shares have gained 9.3% so far this year.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Medtronic, with 4.4% of investors increasing their exposure to MDT stock over the past 30 days.