Medtronic plc (MDT): A Bull Case Theory

We came across a bullish thesis on Medtronic plc (MDT) on Investing Intel’s Substack. In this article, we will summarize the bulls’ thesis on MDT. Medtronic plc (MDT)’s share was trading at $80.68 as of 23rd May. MDT’s trailing and forward P/E were 22.35 and 14.08 respectively according to Yahoo Finance.

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An assembly line of medical devices being packed for distribution.

Medtronic PLC (MDT) delivered robust Q4 and FY2025 results, showcasing solid execution across its portfolio and setting the stage for a strategic transformation. Quarterly revenue grew organically by over 5% to $8.93 billion, with adjusted EPS up 11% to $1.62, and operating profit rising 7.6% year over year to $2.5 billion—or nearly 13% on a constant currency basis. For the full fiscal year, Medtronic generated $33.54 billion in revenue, up nearly 5% organically, and delivered $5.49 in adjusted EPS.

Strength was broad-based across all segments, with cardiovascular and diabetes leading the charge—each posting 12% organic growth, underscoring renewed momentum in key franchises. In a major strategic move, Medtronic announced plans to spin off its diabetes business within the next 18 months, aiming to streamline operations, improve focus, and enhance margin profile. The spin-off will be internally led, suggesting continuity and deep institutional knowledge to support the transition. This separation reflects management’s intent to unlock value and pursue more focused innovation, particularly in core segments like cardiovascular, neurovascular, and surgical robotics.

The diabetes unit, despite recent growth, has historically lagged in profitability and innovation compared to Medtronic’s higher-margin units, and its spin-off could help drive a re-rating of MDT shares. Investors now see a cleaner, more focused medical device company emerging, backed by stable cash flow, improving margins, and strong earnings momentum. If successfully executed, the spin-off may unlock hidden value, positioning MDT as a leaner and more agile player in medtech.

Previously, we have covered Medtronic plc (MDT) in April 2025 wherein we summarized a bullish thesis by Magnus Ofstad on Substack. The author emphasized the company’s ongoing transformation amid operational challenges and strategic realignment. The article highlighted activist investor Starboard Value’s involvement as a potential catalyst for streamlining operations, pushing divestitures, and revitalizing innovation, particularly through platforms like the HUGO Robotic Surgery System. Despite trailing peers in growth and margins, MDT was framed as a defensive value play with upside potential if it successfully executes on its strategic pivot. Since our last coverage, the stock has traded mostly flat as of 27th March.

Medtronic plc (MDT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held MDT at the end of the first quarter which was 67 in the previous quarter. While we acknowledge the risk and potential of MDT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MDT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.