Across medtech, third-quarter profit is estimated at a 4.8% increase, slower than last quarter's pace and trailing the broader US gauge, according to Bloomberg Intelligence. From here, growth is expected to quicken, with first-quarter gains seen at 13% - the best pace since late 2024. Expectations for the latest quarter are subdued, but Citi's Joanne Wuensch still sees "pockets of growth" next year, and Barclays' Christopher Pasquale anticipates steadier revenue trends ahead.
Medtech has largely avoided the worst of tariff and energy shocks. What has dragged on sentiment is the overhang from possible changes to the Affordable Care Act and Medicaid under the One Big Beautiful Bill Act. As Bloomberg Intelligence's Matt Henriksson put it, "The view of the sector as a safe haven has diminished."
JPMorgan's Robert Marcus points to a thin slate of launches, money tilting toward biopharma instead of devices, and a broader swing into AI-linked names as headwinds. He also framed this earnings stretch as a "major clearing event" as companies reset what 2027 should look like and try to "get investors back onside."
Hospitals are also getting more selective, according to Evercore ISI's Vijay Kumar: "There certainly is a question of whether the new projects or new expensive equipment that we plan to purchase, maybe we should pause or push some things for next year." On the flip side, Wuensch calls out a few standouts: Zimmer Biomet Holdings Inc. is rolling through a new slate of products, while Edwards Lifesciences Corp. is awaiting multiple trial readouts.
Company-specific hits have not helped. Boston Scientific Corp. and Stryker Corp. have dealt with cyber attacks, while Baxter International Inc. has faced product recalls - all of which knocked confidence.
Guidance about the quarter after next is where the real signal lives. Market Briefs covers healthcare equities free every morning.
It has been a bruising year on the screen. The S&P 500 Health Care Equipment and Supplies Index, which counts Medtronic Plc, Stryker Corp., and Intuitive Surgical Inc. among its members, has fallen by over 20% so far this year. Over that same period, the broader market is up 13%. RBC Capital Markets' Kendall Au summed up the reset: "The sector narrative will be tough to reverse in 2026," but "we are positive on the 2027 setup."
Politics could add a twist. Marcus says a sweeping Democratic win in the midterms might lift device names, even if health policy would stay unchanged for two years. "This isn't yet in valuations and could be a nice benefit." He also sees a path out of the "penalty box" for Boston Scientific on the back of fresh launches and 2027 data catalysts.
Long-term fundamentals still have support, Henriksson notes, with innovation and solid procedure volumes underpinning the group. Kumar flags three areas to watch: pulsed field ablation for heart rhythm care, continuous glucose monitors, and steady progress in surgical robotics.
The near-term story is a patience test: one more quiet quarter, then a potential pickup. If companies use this earnings season to reset and clarify 2027, the narrative that has weighed on shares could start to loosen. Between stabilizing growth expectations, election-season optionality, and tangible product catalysts, the setup into 2027 looks better than what the screens reflect today.
A soft patch before a strong year is a hard thing to price. Get the free Market Briefs daily newsletter and follow it.
