Patient care is changing globally due to the increasing aging population and the rising prevalence of chronic diseases, which results in higher demand for personalized medicine and the latest technologies. Following this, the global medtech market is continuously transforming with the rapid adoption of technological advancements like AI and ML.
Amid this backdrop, fundamentally sound medtech stocks Becton, Dickinson and Company (BDX), Medtronic plc (MDT), and Abbott Laboratories (ABT) could be ideal portfolio additions as they revolutionize patient care.
In recent times, technology has been a key driver of medical innovations, offering enhanced outcomes, lower costs, and improved access to better patient care. Also, amid the rising complications, global rise in diseases, and demand for personalized medicines, the involvement of technology is becoming more and more integral.
With this evolving landscape, industry leaders are pouring in investments to accelerate the adoption of innovative medical devices to enhance diagnostics, treatment, and monitoring capabilities. In the upcoming year as well, key trends, including surgical robotics, 3D simulations, and brain-implanting technologies, will reshape patient care.
Statista projects the worldwide medical technology market to reach a staggering $597 billion in 2024, whereas the medical devices market is expected to dominate and reach $508 billion in 2024. The market is further anticipated to witness significant revenue growth in the coming years, growing at a CAGR of 5.3%, resulting in a market volume of $772.50 billion by 2029.
Further, with advanced algorithms, machine learning techniques, and other technologies, artificial intelligence (AI) is enhancing the medical devices market. With this, AI in the medical devices market is expected to reach $97.07 billion in 2028, at a CAGR of 44.4%, driven by rising demand for personalized medicine, remote healthcare services, and the emergence of wearable devices.
Considering these conducive industry trends, let’s analyze the fundamentals of the three Medical – Devices & Equipment stocks mentioned above, beginning with the third choice.
Stock #3: Becton, Dickinson, and Company (BDX)
BDX develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products for healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public globally. It operates in three segments: BD Medical; BD Life Sciences; and BD Interventional.
On October 30, BDX launched the new BD® Intraosseous Vascular Access System, which allows access to rapid delivery of fluids or medication in critical emergency circumstances. The procedure involves inserting a needle into the bone marrow cavity when intravenous (IV) access is challenging or delayed.
On October 14, BDX launched a new robotics solution that can automate and standardize single-cell research. This first in a family of high-throughput, robotics-compatible reagent kits allows automation to ensure higher consistency and increased efficiency of large-scale, single-cell discovery studies.
The automation will standardize traditionally manual processes and help accelerate lab work leading to Genomic sequencing.
During the fourth quarter that ended on September 30, 2024, BDX’s revenues increased 6.9% year-over-year to $5.44 billion. Its operating income grew 86.4% from the year-ago value to $650 million. The company’s net income applicable to common shareholders of $421 million indicates growth of 290.1% from the prior year’s quarter.
In addition, the company’s adjusted EPS from continuing operations came in at $3.81, up 11.4% year-over-year, respectively.
Analysts expect BDX's revenue for the first quarter (ending December 2024) to grow 8.8% year-over-year to $5.12 billion. The company's EPS is expected to increase 11.7% year-over-year to $2.99 for the ongoing period. Furthermore, the company surpassed the consensus EPS estimates in each of the trailing four quarters.
BDX’s shares have declined 4.7% over the past month to close the last trading session at $223.01.
BDX’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Growth, Sentiment, and Stability. Within the Medical – Devices & Equipment industry, BDX is ranked #33 out of 138 stocks.
Click here to access additional BDX ratings for Value, Momentum, and Quality.
Stock #2: Medtronic plc (MDT)
MDT develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients globally. The company operates through Cardiovascular Portfolio; Neuroscience Portfolio; Medical Surgical Portfolio; and Diabetes Operating Unit segments.
On November 20, MDT announced U.S. FDA clearance for its new InPen™ app, having features like the detection of missed meal doses, paving the way for its Smart MDI system launch with the Simplera™ continuous glucose monitor (CGM). MDT’s Smart MDI system brings together its InPen™ smart insulin pen and newest Simplera™ CGM.
After clearance, the system became the first to recommend corrections for missed or inaccurate insulin doses, providing real-time, personalized insights for individuals on multiple daily injection therapies.
Also, on November 1, MDT was granted transitional pass-through (TPT) payment for the Medtronic Symplicity Spyral™ renal denervation (RDN) catheter by the Centers for Medicare & Medicaid Services (CMS). RDN is used in the Symplicity™ blood pressure procedure under the Medicare Hospital Outpatient Prospective Payment System.
TPT payment supports patient access to new and innovative technology, including devices granted Breakthrough Device Designations like the Symplicity Spyral RDN system.
MDT’s net sales increased 5.2% year-over-year to $8.40 billion for the second quarter, which ended October 25, 2024. Its non-GAAP operating profit grew 1.6% from the year-ago value to $2.04 billion. Net income attributable to Medtronic and EPS came in at $1.27 billion and $0.99, up 39.7% and 45.6% from the prior year’s quarter, respectively.
The company has again raised its fiscal year 2025 guidance from the prior range, increasing its organic revenue growth projection to 4.75% to 5%. It also raised its adjusted non-GAAP EPS guidance to $5.44 to $5.50 from the prior range of $5.42 to $5.50. This revised guidance suggests a 4.6% to 5.8% growth in non-GAAP EPS.
Street expects MDT’s revenue for the third quarter (ending January 2025) to increase 3% year-over-year to $8.33 billion, and its EPS is expected to grow 4.6% year-over-year to $1.36 for the same period. Moreover, the company surpassed the consensus revenue and EPS estimates in all of the trailing four quarters, which is impressive.
MDT’s stock has increased 1% over the past six months and 5.3% over the past year to close the last trading session at $83.96.
MDT’s sound fundamentals are reflected in its POWR Ratings. It has an overall rating of B, translating to a Buy in our proprietary rating system.
The stock has a B grade for Stability and Value. Within the same industry, MDT is ranked #26 out of 138 stocks.
In addition to the POWR Ratings we’ve stated above, we also have MDT ratings for Growth, Momentum, Sentiment, and Quality. Get all MDT ratings here.
Stock #1: Abbott Laboratories (ABT)
ABT discovers, develops, manufactures, and sells healthcare products worldwide. The company operates through four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices.
On October 10, ABT achieved new major milestones to support its pulsed field ablation (PFA) solutions suite in electrophysiology. ABT completed enrollment ahead of schedule in the global VOLT-AF IDE study supporting the Volt™ PFA System and launched the FOCALFLEX trial to assess its TactiFlex™ Duo Ablation Catheter, Sensor Enabled™ (SE) for treating paroxysmal atrial fibrillation.
Also, the company announced U.S. FDA clearance of its Advisor™ HD Grid X Mapping Catheter, Sensor Enabled™, to support mapping of both PFA and radiofrequency (RF) ablation cases, where visualization of cardiac anatomy is critical. It ensures the best outcomes for people undergoing ablation procedures.
For the third quarter, which ended on September 30, 2024, ABT's net sales increased by 4.9% year-over-year to $10.64 billion. Its operating earnings of $1.86 billion reflect a growth of 12.8% from the prior year’s quarter. Also, the company’s adjusted net earnings stood at $2.12 billion or $1.21 per common share, indicating increases of 5.9% and 6.1% year-over-year, respectively.
Street expects ABT’s revenue and EPS for the fourth quarter (ending December 2024) to increase 7.8% and 12.8% year-over-year to $11.04 billion and $1.34, respectively. Also, the company has topped the consensus EPS and revenue estimates in all four trailing quarters, which is remarkable.
Shares of ABT have surged 6.9% over the past six months and 8.2% over the past year to close the last trading session at $114.90.
ABT’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
ABT has a B grade for Stability and Sentiment. It is ranked #13 out of 138 stocks in the Medical – Devices & Equipment industry.
In addition to the POWR Ratings stated above, we also have ABT ratings for Quality, Growth, Momentum, and Value. Get all ABT ratings here.
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ABT shares were trading at $115.58 per share on Tuesday afternoon, up $0.68 (+0.59%). Year-to-date, ABT has gained 7.10%, versus a 28.26% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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