Medtech Earnings Season Reveals Industry Trends and Tariff Impacts

Major medtech companies are set to report their first-quarter earnings, shedding light on key market trends and the potential impact of new tariffs on the industry. As Intuitive Surgical, Boston Scientific, and Edwards Lifesciences prepare to release their financial results, investors and analysts are closely watching for insights into the performance of crucial sectors such as pulsed field ablation (PFA), transcatheter aortic valve replacement (TAVR), and surgical robotics.

Tariff Concerns Loom Over Earnings Reports

Following Abbott and Johnson & Johnson's earnings reports last week, which highlighted significant tariff-related costs, the industry braces for further updates on this issue. Intuitive Surgical, set to report on Tuesday, faces particular scrutiny due to its substantial manufacturing presence in Mexico.

J.P. Morgan analysts note that Intuitive produces approximately 90% of its instruments and accessories in Mexico. While the company has avoided the worst-case scenario thus far, thanks to the U.S.-Mexico-Canada Agreement (USMCA), it now faces a 25% tariff on non-USMCA compliant goods as of April 2. The extent of this impact remains unclear, with investors eagerly awaiting more details during the earnings call.

Boston Scientific, reporting on Wednesday, may be better positioned to weather the tariff storm. BTIG analysts indicate that the company "does not have meaningful levels of manufacturing or sourcing from Mexico, Canada or China," potentially insulating it from the most severe tariff effects.

Market Dynamics in Key Sectors

Pulsed Field Ablation (PFA) Competition Heats Up

Boston Scientific's position in the PFA market will be a focal point of its earnings report. Recent analyst upgrades suggest that the company's Farapulse device is strongly preferred by electrophysiologists over competitors' offerings. This comes as Johnson & Johnson faces safety concerns and reported a 2% decline in electrophysiology sales in Q1.

TAVR and TMTT Growth Prospects

Edwards Lifesciences, also reporting on Wednesday, is expected to show modest growth in its TAVR sales, with BTIG analysts projecting a 3% increase. The company's transcatheter mitral and tricuspid technologies (TMTT) unit is anticipated to demonstrate more robust growth, with predictions of a 57% revenue jump, albeit from a smaller base.

Investors will be particularly interested in Edwards' outlook for the second half of 2025, with a potential mid-year TAVR label expansion identified as a key growth catalyst. Analysts predict that TMTT sales will accelerate in the third quarter, making the latter part of the year crucial for the company's performance.