Tuesday, Citi analysts maintained a Neutral rating on Medtronic , Inc. (NYSE:MDT) shares, a prominent healthcare equipment player with a $104.88 billion market cap and $33 billion in annual revenue, maintaining a steady price target of $92.00.
According to InvestingPro data, the stock currently trades at $81.79, with analysts' targets ranging from $82 to $112. The firm's analyst, Joanna Wuensch, acknowledged the recent development where CMS (Centers for Medicare & Medicaid Services) has initiated a national coverage analysis (NCA) for Medtronic's Symplicity Spyral renal denervation (RDN) system. This NCA could lead to a draft National Coverage Determination (NCD) by July 13, 2025, with a subsequent 30-day comment period, and a finalized NCD by October 11, 2025.
The start of the NCA is seen as a positive progression following Medtronic's challenging clinical trial journey and the recent achievement of Transitional Pass-Through status in November. The Transitional Pass-Through status facilitates payment for new and innovative medical devices and procedures.
Medtronic's management has estimated that even a 1% market penetration of the target segment, which includes a global population of over 100 million, could translate to revenues exceeding $1 billion. Although the average selling price (ASP) for the catheter is lower than the list price, the CMS transitional pass-through payment amount is currently set at $16,000.
Citi's analysis suggests that the NCA is an encouraging step towards expanding Medtronic's portfolio. The analyst's commentary underscores the significance of the NCD process for the company's Symplicity blood pressure procedure and its potential market opportunity.
Despite the positive developments, Citi's stance on Medtronic's stock remains unchanged at this time. The company offers a solid 3.42% dividend yield and trades at a P/E ratio of 24.94, with InvestingPro showing 8 additional key insights available for subscribers.
In other recent news, RBC Capital Markets has projected a positive outlook for the Medical (TASE:PMCN) Supplies & Devices sector, highlighting stocks like Boston Scientific (NYSE:BSX), Intuitive Surgical (NASDAQ:ISRG), DexCom (NASDAQ:DXCM), Medtronic, and Edwards Lifesciences (NYSE:EW).
The firm anticipates a year of positive momentum for this sector, identifying significant upside opportunities particularly with DexCom. RBC Capital's top picks for 2025 include Abbott Laboratories (NYSE:ABT), Boston Scientific, Stryker Corporation (NYSE:SYK), and Intuitive Surgical.
In more recent developments, Inspire Medical Systems (NYSE:INSP) reported a 33% increase in revenue to $203.2 million in the third quarter, with a net income of $18.5 million. The company also raised its full-year 2024 revenue guidance to a range of $793-798 million. Analysts from Truist Securities, Piper Sandler, and Baird have responded positively to these updates.
Mizuho (NYSE:MFG) Securities has increased the price target on Medtronic shares to $100 from $98, maintaining an Outperform rating. This reflects the firm's positive view on Medtronic's advancements in the renal denervation space with the Symplicity SPYRAL system. Medtronic has also received FDA clearance for its innovative Smart MDI system, which includes the InPen™ app and the Simplera™ continuous glucose monitor.
Finally, TD Cowen has maintained a Buy rating on Medtronic shares, following the company's financial results for the second quarter which surpassed expectations. Medtronic reported revenues of $8.40 billion and earnings per share of $1.26, leading the company to raise its full-year 2025 revenue and EPS guidance.
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