MDT
Medtronic plc
$86.66
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 14.2% above fair value
You pay
$86.66
Bear
$60.73
Fair
$75.91
Bull
$91.10
Bear
$60.73
-29.9%
$4.35 × 12x P/E
Fair
$75.91
-12.4%
$4.35 × 15x P/E
Bull
$91.10
+5.1%
$4.35 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $95.57 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $75.91 per share.
Warnings
Dividend-based valuation: $49.23 (below our primary estimate by 25%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $95.57 (from 51 analysts). Our estimate is 32% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples