Pfizer Inc. (NYSE:PFE) and Medtronic plc (NYSE:MDT) are both trying to prove that years of portfolio investment can translate into more durable growth, but the two healthcare giants are entering very different stages of their turnarounds.
Pfizer is rebuilding around newer medicines as COVID revenue declines and generic and biosimilar competition approaches. Medtronic, meanwhile, is beginning to see faster growth from technologies it has spent years developing across cardiovascular devices, surgery and neuroscience.
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The latest results provide evidence that both strategies are working, but the difference for investors lies in how much still has to go right.
Bull Case
Pfizer’s (NYSE:PFE) strongest argument is the performance of the business underneath COVID. Second-quarter revenue for the company excluding Comirnaty and Paxlovid increased 5% operationally, while recently launched and acquired products generated $3.2 billion in revenue and grew 18% operationally. Several important medicines made contributions to its growth, with Padcev revenue increasing 23% operationally to $667 million, the Vyndaqel family generating $1.76 billion and growing 8% operationally, and Lorbrena revenue increasing 37% operationally.
That growth helped offset another deterioration in Pfizer’s COVID business. Management reduced its 2026 COVID-product revenue expectation from approximately $5 billion to approximately $4 billion, largely reflecting lower expected Paxlovid revenue. Even so, Pfizer raised the midpoint of its overall 2026 revenue guidance by $500 million to $61.5 billion.
Cost reductions offer another lever to the company, as Pfizer expects approximately $6.7 billion in total net savings from its cost-realignment program through 2029 and another $3 billion from its separate manufacturing-optimization program. Those are targets rather than savings already achieved, but successful execution could support earnings while Pfizer expands its newer portfolio.
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Medtronic’s (NYSE:MDT) turnaround is showing up more clearly in its top line. Fiscal 2026 revenue reached $36.4 billion and increased 5.8% organically, which the company described as its strongest annual revenue growth in a decade. Its fourth quarter was even stronger, with revenue rising 9.9% as reported and 6.6% organically to $9.8 billion. Cardiac Ablation Solutions was a standout, with revenue in the segment growing 78% globally during fiscal Q4, including 124% growth in the United States. Medtronic also pointed to Affera, Symplicity, Hugo, Altaviva, and Stealth AXiS among its highest-growth opportunities. Management expects that momentum to continue, guiding for FY2027 organic revenue growth of 6.75% to 7.25% and non-GAAP EPS of $5.90 to $6.00.
Bear Case
Pfizer’s (NYSE:PFE) problem is that its newer products are growing against a companywide backdrop that remains relatively subdued. Total fiscal Q2 revenue increased 3% to $15.03 billion, but operational growth was just 1%, and the company also recorded a $248 million GAAP net loss after recognizing $4.3 billion of non-cash intangible-asset impairments.
Loss of exclusivity remains the larger long-term challenge in this context. Pfizer’s 2026 guidance already incorporates an estimated $1.1 billion unfavorable revenue impact from recent and expected generic and biosimilar competition. Cost savings can soften the earnings impact, but Pfizer ultimately needs newer products and its pipeline to replace revenue lost to competition.
Medtronic has its own reason for caution. While FY2026 revenue growth accelerated, earnings didn’t keep pace. Full-year non-GAAP EPS increased only 0.7% to $5.53, while non-GAAP operating margin declined 130 basis points to 24.4%. Fiscal Q4 non-GAAP EPS actually fell 4.3% to $1.55, with the quarter affected by items including tariffs and the MiniMed Blackstone payment. That creates a different execution test for Medtronic, which is turning stronger sales growth into stronger earnings growth.
Conclusion
Both companies have credible evidence that their turnarounds are progressing, but Medtronic currently has more of that progress visible in its underlying revenue trajectory. Pfizer’s (NYSE:PFE) non-COVID portfolio is growing, its newer products are contributing more, and its cost programs could meaningfully reshape the expense base. Yet it still has to overcome declining COVID revenue and mounting generic and biosimilar competition.
Medtronic has already delivered its strongest annual revenue growth in a decade, followed by 6.6% organic growth in Q4, and management is targeting another 6.75% to 7.25% organic growth in FY2027. Its next challenge is converting that momentum into stronger margins and earnings. That makes Medtronic’s turnaround more convincing on current operating evidence. Pfizer could still deliver substantial improvement if its newer portfolio, pipeline, and cost programs work as planned, but more of its investment case depends on execution that has yet to show up fully in companywide growth.
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This article is originally published at Insider Monkey.
