Medtronic to Spin Off Diabetes Business by 2026

Medtronic plans to spin off its diabetes business into a standalone, publicly traded company within 18 months, aiming to streamline its portfolio and focus on high-margin growth sectors like cardiovascular, neuroscience, and medical surgical markets. The diabetes unit, which achieved nearly $2.5 billion in revenue for the fiscal year ending April 2024 and 10% year-over-year growth, has also faced challenges such as recalls and regulatory scrutiny. The separation is expected to boost Medtronic’s adjusted gross and operating margins and deliver immediate accretion to adjusted earnings per share (EPS). Medtronic recently reported strong quarterly results, surpassing sales and earnings expectations, and approved a dividend increase to $0.71 per share for Q1 fiscal 2026. The company forecasts fiscal 2026 adjusted EPS of $5.50 to $5.60 and organic revenue growth of around 5%, though these projections are sensitive to potential tariff changes. The new diabetes company will focus on intensive insulin management and is projected to benefit from greater operational focus and innovation.