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Medtronic (NYSE: MDT) is a good buy in late 2026 because stars such as value, growth, guidance, partnerships, and dividends are aligning. They point to sustained outperformance and potential acceleration but, more importantly, to robust capital returns.

While share buybacks are at token levels, barely enough to offset dilutive forces and reduce the share count, dividends are more substantial. The dividend is among the top reasons to buy this stock, yielding over 3% with shares near long-term lows. Additionally, MDT is just one increase away from being crowned Dividend King.

Dividend King status is more than just a fancy title. It is a hallmark for well-managed, foresightful companies that can withstand economic downturns, sustaining and growing capital returns over time. It attracts long-term, buy-and-hold institutional investors such as California’s State Retirement Fund, which holds a 12% stake in MDT.

Buy-and-hold and institutional investors help reduce market volatility, as they rarely sell on headlines alone, and underpin upswings when conditions are favorable. Based on institutional trends, including steady accumulation over the past two years and a spike in early Q3, conditions are favorable. Regarding volatility, MDT stock carries a low 0.5x beta, revealing it is only half as likely to move on macro news as the average S&P 500 company.

Medtronic’s Earnings Beat and Raised Guidance Signal More Upside

Medtronic posted a solid Q1 of its fiscal year 2027 (FY2027), with revenue up 13.7% to over $9.75 billion, outperforming guidance and the analysts' consensus by a solid margin, including the impact of a well-telegraphed extra week. Strength came from double-digit or near-double-digit gains across all segments, led by an 18.9% increase in Cardiovascular. Core franchises like Rhythm Management were solid, growing 15%, and were supported by newer businesses such as Ablation Solutions, which grew 80%. Other segments, such as Neurosciences, Medical/Surgical, and Diabetes, grew organically by 9.3%, 10.2%, and 14.9%, respectively.

Margin was another area of strength. The company widened its margin on a GAAP and adjusted basis, driving faster earnings improvement. Critical takeaways include the 14.9% increase in adjusted operating earnings, a 15.1% increase in adjusted earnings per share (EPS), and free cash flow more than doubling.

Guidance is a catalyst for higher share prices. The company not only outperformed in Q1 FY2027, but also expects those strengths to carry into the next quarter and the rest of the year. Management raised the revenue range by 50 basis points (bps) and the low end of the EPS range, putting the midpoint above the consensus forecast, and is likely being cautious. Momentum in key franchises, investments, and partnerships points to sustained strength, potential outperformance, and improved guidance in the coming quarters.

Analysts Reflect Confidence in MDT’s Outlook

Analysts are responding favorably to MDT’s earnings report, highlighting top- and bottom-line strength, guidance, and potential acceleration in upcoming quarters. The critical takeaway is that analyst trends, which include price target increases and upgrades ahead of the release, remain bullish and are strengthening.

The consensus price target forecasted about 10% upside ahead of the report, with the high-end of $120 another 20% higher, and high conviction in the Moderate Buy rating. MarketBeat tracks 27 analysts covering MDT, a substantial figure for a blue-chip healthcare stock.

This group rates it as a consensus Moderate Buy with 67% Buy-side bias and no Sell ratings logged. Conviction in this rating will likely continue to firm as the year progresses, with the high-end target moving higher.

Medtronic’s Growth Catalysts Could Fuel the Next Leg Higher

This year’s catalysts include investment in Pi-Cardia and a partnership with Cornerstone Robotics. Pi-Cardia expands the cardiovascular portfolio with an advanced, potentially life-saving device for heart valve replacement, while Cornerstone Robotics is the robotic surgery portfolio. Medtronic has a deal for international distribution of its Sentire System, providing hospitals with a choice alongside the Hugo system.

Medtronic’s stock price also responded favorably to the earnings news, rising by approximately 5% in early premarket trading. The move showed support at a cluster of moving averages, including the long-term 150-week and short-term 30-day exponential moving averages, which could serve as a launchpad for a rally. If the market follows through on this signal, MDT shares could retest the critical resistance target at the top of its existing range within weeks, if not days, and move to a fresh high before the next earnings report.

Medtronic’s biggest risk is cybersecurity. It experienced a major breach earlier this year, exposing sensitive personal information and giving hackers access to devices. The company says no health-related issues have arisen, but the event raises safety concerns and increases litigation risk.

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