MDT

Medtronic just posted its strongest top line in five years: FY2026 revenue of $36.4B grew 8.4% YoY, a clear reacceleration off the FY2022–FY2024 stall ($31.7B → $31.2B → $32.4B). Operating income kept pace at +8.6% on a 17.8% operating margin, and the franchise throws off real cash — $7.33B operating cash flow against $1.90B capex leaves roughly $5.4B of free cash flow, comfortably funding the $3.64B dividend (an implied ~3.6% yield at $79.34). The audit narrative is clean: PwC issued unqualified opinions on both the financials and internal control over financial reporting, so the quality of these numbers is not in question. The balance sheet is sturdy enough — liabilities/equity of 0.87x and current assets ($24.8B) at ~2.1x current liabilities ($11.7B) — and current debt fell 37.8%.

The valuation and the tape are what make this interesting rather than merely safe. At 21.3x diluted EPS and 2.8x sales for a defensive, diversified medtech with a reaccelerating top line and a near-4% yield, the price is fair-to-slightly-cheap, not stretched. Notably, management repurchased 4.5M shares in fiscal Q4 at an average of $95.34 (range $86–97), with $1.18B still authorized — the stock now sits ~17% below where the company itself was buying, which is a constructive signal for a patient holder being paid to wait.