Bank of America (BofA) forecasts that Medtronic will exceed its topline organic revenue growth expectations of 4.75% ahead of the medtech giant’s Q3 FY 2025 earnings call on 18 February.
BofA’s equity research managing director for medical technology Travis Steed stated that the 4.75% guide figure represented a comparative adjustment decrease of 30 basis points (BPS) while noting that the ablation therapy devices market had accelerated by 150BPS throughout the most recent quarter.
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Medtronic expects its overall cardiac ablation solutions (CAS) business, encompassing products such as its PulseSelect pulsed field ablation (PFA) system, which received approval from the US Food and Drug Administration (FDA) in December 2023, to grow by strong double-digits in Q3 FY 2025 since being affected by flat growth in the previous quarter due partly to a since-resolved PulseSelect supplier issue.
PulseSelect is a PFA system used in electrophysiology (EP) to treat cardiac arrhythmias.
Steed said: “Based on our EP market model, if the market grew 25% this quarter, then Medtronic’s CAS growth would be 11% this quarter.
Affirming its belief in Medtronic’s expectations regarding its CAS business, BofA noted that it saw potential in FY 2026 for $1.2bn of revenue growth for the Affera mapping and ablation system, a Medtronic product that received FDA clearance in October 2024.
Steed explained that BofA agreed with Medtronic’s forecasts due to several factors, including its expressed intent to “significantly expand” its Affera manufacturing capabilities during its previous earnings call and evidence of “huge enthusiasm” from physicians over Affera since it received US market approval.
Looking ahead to next year, BofA also noted that Medtronic’s renal denervation (RDN) system, the Symplicity Spyral, could add up to $300m in growth across the year.
Sharing additional final thoughts, Steed mentioned that BofA thought Medtronic had recently been talking more about portfolio management and M&A activity.
“The recent chief financial officer (CFO) announcement also highlighted that Thierry Piéton executed portfolio management through tuck-ins, divestitures and partnerships during his time at Renault,” Steed noted.
Piéton will assume the CFO role at Medtronic from 3 March 2025.
Steed concluded: “Medtronic remains one of our favourite value stocks given it has several growth catalysts that could potentially accelerate FY 2026+ revenue growth.”
