US Equities Analysis

MDT — Medtronic

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 21.3%
Profit Margins 13.2%
Return on Equity 9.93%
Free Float 1.28B
Dividend Yield 3.56%
Short Int % Utilisation 1.31%

2.2 Growth

Metric Value
Revenue Growth 9.9%
EBITDA 12.19 (Ratio)
Enterprise Value 122.93B
EV/Revenue 3.38
EV/EBITDA 12.19

Revenue growth of 9.9% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 4.17%
Risk / Std Dev (Ann.)* 23.65%
1-Year Price Return* 1.31%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $91.27
52-Week Range $73.31 – $106.33
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $36.36B
Prior annual revenue $33.54B
EBIT $6.85B
Tax rate 21.17%
NOPAT = EBIT × (1 − tax rate) $5.40B
Forecast start-growth basis 8.43%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $5.40B
Add: depreciation & amortisation $2.96B
Less: capital expenditure -$1.90B
Less/(add): working-capital cash-flow movement -$1.42B
Current unlevered FCFF $5.03B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 8.43% $5.86B $3.21B -$2.06B -$1.54B $5.46B $5.28B
2 6.95% $6.26B $3.43B -$2.51B -$1.65B $5.53B $5.02B
3 5.46% $6.60B $3.62B -$2.97B -$1.74B $5.51B $4.68B
4 3.98% $6.87B $3.76B -$3.43B -$1.81B $5.39B $4.30B
5 2.50% $7.04B $3.86B -$3.86B -$1.85B $5.18B $3.87B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.57
Cost of equity 7.82%
Pre-tax cost of debt 2.53%
WACC 6.71%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $126.16B
Implied terminal EV / EBITDA 9.87x
Terminal value as % of enterprise value 79.75%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $23.15B
Present value of terminal value $91.17B
Indicated enterprise value $114.31B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $114.31B
Less: gross interest-bearing debt $27.96B
Add: cash and equivalents $9.22B
Add: affiliate investments $0.00
Less: minority interests $609.00M
Indicated common equity value $94.96B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 1,280,045,190.00
Share-count basis reported shares outstanding; option/RSU dilution data not separately available
Current market price $92.61
DCF indicative value per share $74.19
Indicative value vs. market price -19.89%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:41:37.170140 UTC; latest reported fiscal period: 2026-04-30 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -24.19% -18.62%
Adjusted R² 0.08 0.09
Annualised residual volatility 21.59% 21.30%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.22 (1.70) 0.37 (2.59)
Size (SMB) 0.55 (3.22) 0.51 (2.79)
Value (HML) 0.10 (0.70) -0.11 (-0.63)
Profitability (RMW) NM 0.21 (1.39)
Investment (CMA) NM 0.42 (1.59)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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