Medtronic to Acquire CathWorks for Up to $585M
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16h ago
0mins
Should l Buy MDT?
Source: seekingalpha
- Acquisition Overview: Medtronic announced it will exercise its option to acquire CathWorks, an Israeli medical device company, valued at up to $585 million, with potential undisclosed earn-out payments, aimed at enhancing Medtronic's interventional cardiology portfolio.
- Technology Integration: CathWorks specializes in coronary digital health innovations, with its FFRangio System combining artificial intelligence and advanced computational science to provide comprehensive physiological assessments directly from routine coronary angiograms, thereby improving diagnostic accuracy in cardiology.
- Strategic Partnership Continuation: This acquisition aims to extend the strategic partnership established in 2022, which included a co-promotion agreement for the FFRangio System in the U.S., Europe, and Japan, where it is commercially available, further solidifying Medtronic's position in the global market.
- Regulatory Approval Process: The deal is pending clearance from the U.S. Federal Trade Commission, expected to be completed by the end of Medtronic's fiscal year 2026, and upon closing, CathWorks will become part of Medtronic while both companies will operate independently until the deal is finalized.
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Analyst Views on MDT
Wall Street analysts forecast MDT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MDT is 111.76 USD with a low forecast of 102.00 USD and a high forecast of 120.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
11 Buy
9 Hold
0 Sell
Moderate Buy
Current: 102.710
Low
102.00
Averages
111.76
High
120.00
Current: 102.710
Low
102.00
Averages
111.76
High
120.00
About MDT
Medtronic Public Limited Company is an Ireland-based company, which provides healthcare technology solutions. The Company’s products category includes Advanced Surgical Technology; Cardiac Rhythm; Cardiovascular; Digestive & Gastrointestinal; Ear, Nose & Throat; General Surgery; Gynecological; Neurological; Oral & Maxillofacial; Patient Monitoring; Renal Care; Respiratory; Spinal & Orthopedic; Surgical Navigation & Imaging; Urological; Product Manuals; Product Ordering & Inquiries; and Product Performance & Advisories. Its products include Cardiac Implantable Electronic Device (CIED) Stabilization, Aortic Stent Graft Products, CareLink Personal Therapy Management Software, CareLink Pro Therapy Management Software. Its services and solutions include Ambulatory Surgery Center Resources, Care Management Services, Digital Connectivity Information Technology (IT) Support, Equipment Services and Support, Innovation Lab, Medtronic Healthcare Consulting, and Office-Based Sinus Surgery.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Healthcare Stocks Show Dividend Growth Potential
- AbbVie's Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and consistent dividend growth capability.
- Strong Financial Performance: AbbVie reported third-quarter revenue of $15.8 billion, a 9% year-over-year increase, although earnings per share fell 38% to $1.86, its investments in oncology are expected to lay the groundwork for future growth and enhance market competitiveness.
- Medtronic's Market Position: Medtronic, the largest stand-alone medical device maker with a market cap of $132 billion, reported second-quarter revenue of $9 billion, up 6.6% year-over-year, and forecasts a 5.5% revenue increase in 2026, indicating sustained growth potential in the medical device sector.
- Sustainability of Dividend Growth: With dividend payout ratios of 58% for AbbVie and 69% for Medtronic, both companies maintain relatively high ratios; however, due to strong free cash flow and ongoing revenue growth, they are expected to sustain their dividend payments, bolstering investor confidence.
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AbbVie and Medtronic's Dividend Growth Potential
- AbbVie Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and sustainable dividend growth potential.
- Medtronic Market Growth: In Q2 of fiscal 2026, Medtronic reported $9 billion in revenue, a 6.6% year-over-year increase, with EPS rising 8% to $1.07, and it anticipates a 5.5% revenue growth, showcasing its successful pivot into smart devices.
- Importance of R&D Investment: Both companies prioritize R&D, with AbbVie investing over $19 billion in 2023 to ensure ongoing product innovation, while Medtronic focuses on new product development to maintain competitiveness despite dividend payout pressures.
- Market Competitive Advantage: The size and diversification of AbbVie and Medtronic allow them to sustain revenue growth across various market segments, with AbbVie's oncology products accounting for 11% of its revenue and Medtronic planning to spin off its diabetes business to optimize resource allocation.
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Medtronic to Acquire CathWorks for Up to $585 Million
- Acquisition Scale: Medtronic announced its intention to acquire Israeli medical device company CathWorks for up to $585 million, with potential undisclosed earn-out payments, indicating a strategic expansion into digital health.
- Technological Integration: CathWorks focuses on coronary digital health, and its FFRangio system utilizes AI and advanced computational science to deliver FFR values across the entire coronary tree, aiding physicians in accurately identifying ischemic lesions and optimizing patient revascularization treatments.
- Market Outlook: This acquisition follows a strategic partnership agreement with CathWorks in 2022, highlighting Medtronic's further penetration into the U.S., European, and Japanese markets, which is expected to enhance its competitive position in the field of coronary physiology.
- Financial Impact Assessment: While the acquisition is expected to have an immaterial effect on Medtronic's GAAP and adjusted earnings per share for fiscal year 2027, it may yield neutral to accretive effects in the long term, reflecting the company's confidence in future growth.
See More
Medtronic to Acquire CathWorks for Up to $585M
- Acquisition Overview: Medtronic announced it will exercise its option to acquire CathWorks, an Israeli medical device company, valued at up to $585 million, with potential undisclosed earn-out payments, aimed at enhancing Medtronic's interventional cardiology portfolio.
- Technology Integration: CathWorks specializes in coronary digital health innovations, with its FFRangio System combining artificial intelligence and advanced computational science to provide comprehensive physiological assessments directly from routine coronary angiograms, thereby improving diagnostic accuracy in cardiology.
- Strategic Partnership Continuation: This acquisition aims to extend the strategic partnership established in 2022, which included a co-promotion agreement for the FFRangio System in the U.S., Europe, and Japan, where it is commercially available, further solidifying Medtronic's position in the global market.
- Regulatory Approval Process: The deal is pending clearance from the U.S. Federal Trade Commission, expected to be completed by the end of Medtronic's fiscal year 2026, and upon closing, CathWorks will become part of Medtronic while both companies will operate independently until the deal is finalized.
See More
Medtronic to Acquire CathWorks, Transforming CAD Diagnosis and Treatment
- Acquisition Intent: Medtronic announced its plan to acquire CathWorks for up to $585 million, aiming to revolutionize the diagnosis and treatment of coronary artery disease through the CathWorks FFRangio® system, thereby enhancing patient care standards.
- Partnership Background: This acquisition follows a strategic partnership established in 2022, where both companies have co-promoted the CathWorks technology in the U.S., Europe, and Japan, demonstrating its potential to disrupt the traditional FFR market and accelerate market growth.
- Technological Advantage: The CathWorks FFRangio system employs artificial intelligence and advanced computational science to provide comprehensive physiological assessments, significantly improving diagnostic accuracy while reducing the invasiveness associated with traditional FFR, which is expected to enhance clinical outcomes for patients.
- Market Outlook: The transaction is anticipated to close by the end of Medtronic's fiscal year 2026, with CathWorks continuing to operate independently post-acquisition, leveraging Medtronic's global resources to expand its influence in the coronary physiology market.
See More
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- Medicare Coverage: Medtronic's MiniMed™ 780G system is now covered by Medicare, paired with Abbott's Instinct sensor, expanding sensor options for Medicare users and enhancing flexibility and quality of life for diabetes patients.
- FDA Approval: The FDA has cleared the MiniMed™ 780G system for use with ultra rapid-acting insulins like Fiasp and Lyumjev, providing diabetes patients with more personalized treatment options to effectively manage post-meal glucose spikes.
- Automated Insulin Delivery: The MiniMed™ 780G system automatically adjusts insulin delivery every five minutes, alleviating the daily decision-making burden for patients and helping them maintain better glucose control, thereby improving overall health outcomes.
- Integration Advantage: The combination of the Instinct sensor with the MiniMed™ 780G system's SmartGuard™ algorithm offers the world's smallest and thinnest integrated sensor, expected to significantly enhance the daily management experience for diabetes patients and improve their quality of life.
See More
Healthcare Stocks Show Dividend Growth Potential
- AbbVie's Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and consistent dividend growth capability.
- Strong Financial Performance: AbbVie reported third-quarter revenue of $15.8 billion, a 9% year-over-year increase, although earnings per share fell 38% to $1.86, its investments in oncology are expected to lay the groundwork for future growth and enhance market competitiveness.
- Medtronic's Market Position: Medtronic, the largest stand-alone medical device maker with a market cap of $132 billion, reported second-quarter revenue of $9 billion, up 6.6% year-over-year, and forecasts a 5.5% revenue increase in 2026, indicating sustained growth potential in the medical device sector.
- Sustainability of Dividend Growth: With dividend payout ratios of 58% for AbbVie and 69% for Medtronic, both companies maintain relatively high ratios; however, due to strong free cash flow and ongoing revenue growth, they are expected to sustain their dividend payments, bolstering investor confidence.
See More
AbbVie and Medtronic's Dividend Growth Potential
- AbbVie Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and sustainable dividend growth potential.
- Medtronic Market Growth: In Q2 of fiscal 2026, Medtronic reported $9 billion in revenue, a 6.6% year-over-year increase, with EPS rising 8% to $1.07, and it anticipates a 5.5% revenue growth, showcasing its successful pivot into smart devices.
- Importance of R&D Investment: Both companies prioritize R&D, with AbbVie investing over $19 billion in 2023 to ensure ongoing product innovation, while Medtronic focuses on new product development to maintain competitiveness despite dividend payout pressures.
- Market Competitive Advantage: The size and diversification of AbbVie and Medtronic allow them to sustain revenue growth across various market segments, with AbbVie's oncology products accounting for 11% of its revenue and Medtronic planning to spin off its diabetes business to optimize resource allocation.
See More
Medtronic to Acquire CathWorks for Up to $585 Million
- Acquisition Scale: Medtronic announced its intention to acquire Israeli medical device company CathWorks for up to $585 million, with potential undisclosed earn-out payments, indicating a strategic expansion into digital health.
- Technological Integration: CathWorks focuses on coronary digital health, and its FFRangio system utilizes AI and advanced computational science to deliver FFR values across the entire coronary tree, aiding physicians in accurately identifying ischemic lesions and optimizing patient revascularization treatments.
- Market Outlook: This acquisition follows a strategic partnership agreement with CathWorks in 2022, highlighting Medtronic's further penetration into the U.S., European, and Japanese markets, which is expected to enhance its competitive position in the field of coronary physiology.
- Financial Impact Assessment: While the acquisition is expected to have an immaterial effect on Medtronic's GAAP and adjusted earnings per share for fiscal year 2027, it may yield neutral to accretive effects in the long term, reflecting the company's confidence in future growth.
See More
Medtronic to Acquire CathWorks for Up to $585M
- Acquisition Overview: Medtronic announced it will exercise its option to acquire CathWorks, an Israeli medical device company, valued at up to $585 million, with potential undisclosed earn-out payments, aimed at enhancing Medtronic's interventional cardiology portfolio.
- Technology Integration: CathWorks specializes in coronary digital health innovations, with its FFRangio System combining artificial intelligence and advanced computational science to provide comprehensive physiological assessments directly from routine coronary angiograms, thereby improving diagnostic accuracy in cardiology.
- Strategic Partnership Continuation: This acquisition aims to extend the strategic partnership established in 2022, which included a co-promotion agreement for the FFRangio System in the U.S., Europe, and Japan, where it is commercially available, further solidifying Medtronic's position in the global market.
- Regulatory Approval Process: The deal is pending clearance from the U.S. Federal Trade Commission, expected to be completed by the end of Medtronic's fiscal year 2026, and upon closing, CathWorks will become part of Medtronic while both companies will operate independently until the deal is finalized.
See More
Medtronic to Acquire CathWorks, Transforming CAD Diagnosis and Treatment
- Acquisition Intent: Medtronic announced its plan to acquire CathWorks for up to $585 million, aiming to revolutionize the diagnosis and treatment of coronary artery disease through the CathWorks FFRangio® system, thereby enhancing patient care standards.
- Partnership Background: This acquisition follows a strategic partnership established in 2022, where both companies have co-promoted the CathWorks technology in the U.S., Europe, and Japan, demonstrating its potential to disrupt the traditional FFR market and accelerate market growth.
- Technological Advantage: The CathWorks FFRangio system employs artificial intelligence and advanced computational science to provide comprehensive physiological assessments, significantly improving diagnostic accuracy while reducing the invasiveness associated with traditional FFR, which is expected to enhance clinical outcomes for patients.
- Market Outlook: The transaction is anticipated to close by the end of Medtronic's fiscal year 2026, with CathWorks continuing to operate independently post-acquisition, leveraging Medtronic's global resources to expand its influence in the coronary physiology market.
See More
Medtronic Launches New Diabetes Management System Enhancing Patient Flexibility
- Medicare Coverage: Medtronic's MiniMed™ 780G system is now covered by Medicare, paired with Abbott's Instinct sensor, expanding sensor options for Medicare users and enhancing flexibility and quality of life for diabetes patients.
- FDA Approval: The FDA has cleared the MiniMed™ 780G system for use with ultra rapid-acting insulins like Fiasp and Lyumjev, providing diabetes patients with more personalized treatment options to effectively manage post-meal glucose spikes.
- Automated Insulin Delivery: The MiniMed™ 780G system automatically adjusts insulin delivery every five minutes, alleviating the daily decision-making burden for patients and helping them maintain better glucose control, thereby improving overall health outcomes.
- Integration Advantage: The combination of the Instinct sensor with the MiniMed™ 780G system's SmartGuard™ algorithm offers the world's smallest and thinnest integrated sensor, expected to significantly enhance the daily management experience for diabetes patients and improve their quality of life.
See More
