Is Medtronic PLC (MDT) overvalued?
On Equity Rank's model estimate, MDT trades 21% below its fair value. Medtronic PLC (MDT) last closed at $101.80; the multi-method model fair value is $128.18.
| Price | Model fair value | Price vs model |
|---|---|---|
| $101.80 | $128.18 | 21% below |
What the answer rests on
- 8 of 10 valuation methods put MDT's value above its price and 2 put it below, so the methods mostly agree.
- To justify today's price, MDT's free cash flow would need to grow about 4.5% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 5.8% a year.
- MDT trades at 25.8 times its last year's earnings, against a median of 31.3 for 37 profitable Medical Devices companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 41% below to 8% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind MDT's fair value · What prices assume · Other companies