Issuing a largely positive outlook on the MedTech sector for 2026, Citi on Thursday upgraded Penumbra (PEN) and Bausch + Lomb (BLCO) on product launches but downgraded Intuitive Surgical (ISRG) and Haemonetics (HAE), citing the stocks’ recent rally.
Thanks to strong fundamentals, new product cycles, and robust balance sheets, MedTech remains “impressive” into 2026 even without a “big” product driver similar to the launch of the pulsed field ablation technology, analyst Joanne Wuensch wrote.
However, the analyst highlighted the importance of the stock selection, noting that while factors such as rising M&A activity, easing tariff concerns, and an improving rate environment supported the sector this year, only “pockets of MedTech” could outperform in 2026.
“2025 was a year of M&A, not just acquisitions but also divestitures, as companies look to accelerate revenue growth rates and streamline product portfolios, a trend we anticipate that will continue in 2026,” Wuensch added.
According to the analyst, stock valuation will be boosted by multiple clinical and regulatory milestones scheduled for next year, including the U.S. launch of Elios, a minimally invasive glaucoma surgery procedure expected from Bausch + Lomb’s (BLCO) in H2 2026.
Upgrades
Wuensch upgraded the Canadian MedTech to Buy from Neutral and raised its price target to $20 from $16 per share, arguing that at its recent Investor Day, BLCO management “ushered Bausch into a new phase of its story.”
“A robust pipeline of assets produces multiple shots on goals that support the next wave of value creation, with potential peak sales of $7B,” contributing to expanding margins that drive double-digit EPS growth,” the analyst wrote on Bausch + Lomb (BLCO).
Wuensch upgraded Penumbra (PEN) to Buy from Neutral and raised its price target to $350 from $285, noting the company’s “under promise over delivery guidance methodology” and its upcoming product launches.
Downgrades
Citing the recovery in Haemonetics’ (HAE) shares post the company's Q3 FY25 revenue miss in February, the analyst wrote that “we anticipate that the next move up (or down) will be a quarter-by-quarter event.”
Despite consensus-beating 2026 revenue and adjusted EPS estimates for the blood management solutions provider, Wuensch downgraded Haemonetics (HAE) to Neutral from Buy but raised its price target to $88 from $77 per share.
Intuitive Surgical (ISRG) “has provided little in terms of 2026 expectations,” the analyst wrote as she downgraded the company to Neutral from Buy and cut its price target to $635 from $650, arguing that “the stock will re-base following the recent price appreciation.”
With a Buy rating, the analyst raised her price target on DexCom (DXCM) to $77 from $75 and opened a positive catalyst watch, noting that the glucose monitoring equipment maker’s 2026 outlook expected in early January could “provide a clearing event for the stock.”
Wuensch opened another positive catalyst watch on Baxter International (BAX). She noted that while the company's 2026 outlook can trail Street’s current expectations, it “could prove to be a clearing event and the opportunity to re-engage in more consistent financial delivery, finally.” She maintained her Neutral and $21 per share target on Baxter (BAX).
The analyst opened a negative catalyst watch on Tandem Diabetes (TNDM) ahead of its Q4 2025 results, noting that the insulin pump maker, following the stock’s recent gains, could struggle to meet expectations of a potential growth in its U.S. new starts after four years of declines. Despite a Neutral rating, Wuensch raised her price target on Tandem (TNDM) to $22 from $16.
Top picks
Heading into 2026, Citi’s top MedTech picks include Medtronic (MDT) and iRhythm Technologies (IRTC), for which it has granted Buy ratings and price targets of $117 and $242 per share, respectively.
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