Should You Buy MMED Stock After the MiniMed IPO?
The firm is expected to pay out a dividend of $2.87 in 2026, a meager 1.4% growth. 2027 is when the higher dividend kicks in, with a consensus 7.7% growth taking the 2027 dividend to $3.09 for the fiscal year. Considering the stock is 8% down from its 52-week high, investors might want to lock in a 2027 forward dividend yield of 3.15% today.
As far as MiniMed is concerned, the firm generated about 8% of the company’s revenue in FY2025. If the IPO is priced at $25, it would value the company at around 6% of Medtronic’s market cap. Considering MiniMed is growing faster than the parent company at the moment, the IPO seems fairly valued, especially if the separation unlocks better valuation in the future.
Medtronic Beats Wall Street Earnings Estimates
Medtronic reported its Q3 earnings on Feb. 17, comfortably beating the consensus estimates. The EPS of $1.36 per share narrowly beat expectations of $1.35, while the revenue of $9.02 billion also surpassed the estimated $8.99 billion. The company’s Cardiac Ablation Solutions business was the fastest-growing segment, registering over 80% YoY growth. For fiscal year 2026, the healthcare company expects an EPS between $5.62 and $5.66.
When asked about how the company can deliver growth in 2027, management highlighted improving gross margins and operating margin leverage. There was no significant comment from the management regarding the MiniMed IPO, but that could change pretty soon as the March 5 date nears. That’s when the IPO subscription period officially begins.
What Are Analysts Saying About MDT Stock?
Wells Fargo maintained its “Buy” rating on the MDT stock on Feb. 19. One day before this, Truist lowered the stock’s price target from $107 to $103.
Despite 14 “Strong Buy” ratings from Wall Street analysts, the company also has 13 “Hold” ratings, which suggests analysts are divided about the stock’s prospects. Once the MiniMed Group goes public, MDT might be able to focus on its high-margin business, thus potentially improving analyst sentiment. Until then, Medtronic remains a consensus “Moderate Buy.”
On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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