Medtronic PLC: Turnaround is Underway. Buy at $100 PT.

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Medtronic PLC: Turnaround is Underway. Buy at $100 PT.

Medtronic PLC UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: Is the market right that MDT is a 4% grower?

No. We think the market is incorrectly capping MDT's growth potential to historical levels vs

underwriting the incremental growth possible from what in our view is a reinvigorated pipeline.

Medtronic now has multiple independent growth vectors in commercial or late-stage pipeline

supplemented by a more disciplined run of tuck-in M&A that we believe will sustain at least a ~5%

sales CAGR over '26-'29. We are more optimistic as these end-markets will likely improve MDT's

overall WAMGR given the focus in higher-growth areas while at the same time de-risk reliance on a

single asset/segment, like CAS.

Q: Can margin flow through and enable EPS to grow above topline?

Yes. After heavier upfront investments in several pipeline initiatives as we detail below, we project

EPS to outpace topline growth through the end of the decade at least. We model 8% EPS growth

CAGR over '26-'29 (in line with the Street at ~8% over the same period).

UBS VIEW Our Buy rating rests on our view that MDT is on the cusp of a turnaround and that investors too

quickly write off incremental growth potential from the reinvigorated pipeline. At just ~12x '27 P/E,

we think the market is assuming ~4% growth at the group level into the mid-term at least vs our

expectation that 5%+ growth is sustainable moving through FY28 onwards, supported by ramping

commercial launches (AltaViva, RDN), new product launches, and strategic tuck-ins. We also think

the market is underappreciating the ability for MDT to grow EPS above topline.