Intrinsic value of Medtronic - MDT

Previous Close

$88.02

  Intrinsic Value

$53.35

stock screener

  Rating & Target

sell

-39%

Previous close

$88.02

 
Intrinsic value

$53.35

 
Up/down potential

-39%

 
Rating

sell

We calculate the intrinsic value of MDT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 121.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.00
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
Revenue, $m
  30,601
  31,581
  32,648
  33,804
  35,051
  36,390
  37,822
  39,352
  40,980
  42,712
  44,550
  46,498
  48,560
  50,741
  53,046
  55,480
  58,048
  60,757
  63,612
  66,621
  69,790
  73,127
  76,639
  80,335
  84,224
  88,314
  92,616
  97,139
  101,894
  106,893
Variable operating expenses, $m
  24,785
  25,380
  26,028
  26,731
  27,488
  28,302
  29,172
  30,101
  31,091
  32,143
  27,067
  28,251
  29,504
  30,829
  32,229
  33,708
  35,269
  36,914
  38,649
  40,477
  42,403
  44,430
  46,564
  48,810
  51,173
  53,658
  56,271
  59,019
  61,909
  64,946
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  24,785
  25,380
  26,028
  26,731
  27,488
  28,302
  29,172
  30,101
  31,091
  32,143
  27,067
  28,251
  29,504
  30,829
  32,229
  33,708
  35,269
  36,914
  38,649
  40,477
  42,403
  44,430
  46,564
  48,810
  51,173
  53,658
  56,271
  59,019
  61,909
  64,946
Operating income, $m
  5,816
  6,201
  6,620
  7,073
  7,563
  8,088
  8,650
  9,250
  9,889
  10,569
  17,482
  18,247
  19,056
  19,912
  20,816
  21,771
  22,779
  23,842
  24,963
  26,143
  27,387
  28,697
  30,075
  31,525
  33,051
  34,656
  36,344
  38,119
  39,985
  41,947
EBITDA, $m
  19,194
  19,808
  20,478
  21,203
  21,985
  22,824
  23,723
  24,682
  25,704
  26,790
  27,942
  29,164
  30,458
  31,826
  33,271
  34,798
  36,409
  38,108
  39,899
  41,786
  43,774
  45,867
  48,070
  50,388
  52,827
  55,392
  58,091
  60,927
  63,910
  67,045
Interest expense (income), $m
  0
  1,806
  1,882
  1,970
  2,066
  2,170
  2,282
  2,402
  2,531
  2,669
  2,815
  2,971
  3,136
  3,311
  3,496
  3,692
  3,899
  4,118
  4,349
  4,592
  4,849
  5,119
  5,404
  5,704
  6,020
  6,352
  6,702
  7,069
  7,456
  7,862
  8,290
Earnings before tax, $m
  4,011
  4,319
  4,650
  5,007
  5,393
  5,806
  6,248
  6,719
  7,221
  7,754
  14,512
  15,111
  15,745
  16,416
  17,124
  17,872
  18,661
  19,493
  20,370
  21,294
  22,268
  23,292
  24,371
  25,505
  26,699
  27,955
  29,275
  30,663
  32,123
  33,657
Tax expense, $m
  1,083
  1,166
  1,255
  1,352
  1,456
  1,568
  1,687
  1,814
  1,950
  2,094
  3,918
  4,080
  4,251
  4,432
  4,624
  4,825
  5,039
  5,263
  5,500
  5,750
  6,012
  6,289
  6,580
  6,886
  7,209
  7,548
  7,904
  8,279
  8,673
  9,087
Net income, $m
  2,928
  3,153
  3,394
  3,655
  3,937
  4,238
  4,561
  4,905
  5,271
  5,660
  10,594
  11,031
  11,494
  11,983
  12,501
  13,047
  13,623
  14,230
  14,870
  15,545
  16,255
  17,003
  17,791
  18,619
  19,490
  20,407
  21,371
  22,384
  23,450
  24,570

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  102,689
  105,975
  109,557
  113,437
  117,621
  122,113
  126,920
  132,052
  137,518
  143,328
  149,495
  156,032
  162,952
  170,271
  178,006
  186,173
  194,792
  203,882
  213,464
  223,560
  234,195
  245,392
  257,178
  269,581
  282,630
  296,356
  310,791
  325,969
  341,926
  358,700
Adjusted assets (=assets-cash), $m
  102,689
  105,975
  109,557
  113,437
  117,621
  122,113
  126,920
  132,052
  137,518
  143,328
  149,495
  156,032
  162,952
  170,271
  178,006
  186,173
  194,792
  203,882
  213,464
  223,560
  234,195
  245,392
  257,178
  269,581
  282,630
  296,356
  310,791
  325,969
  341,926
  358,700
Revenue / Adjusted assets
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
Average production assets, $m
  71,852
  74,151
  76,657
  79,373
  82,300
  85,443
  88,807
  92,398
  96,222
  100,287
  104,603
  109,176
  114,018
  119,140
  124,551
  130,266
  136,297
  142,657
  149,361
  156,426
  163,867
  171,702
  179,949
  188,627
  197,757
  207,361
  217,462
  228,082
  239,247
  250,984
Working capital, $m
  1,652
  1,705
  1,763
  1,825
  1,893
  1,965
  2,042
  2,125
  2,213
  2,306
  2,406
  2,511
  2,622
  2,740
  2,864
  2,996
  3,135
  3,281
  3,435
  3,598
  3,769
  3,949
  4,139
  4,338
  4,548
  4,769
  5,001
  5,245
  5,502
  5,772
Total debt, $m
  34,853
  36,483
  38,259
  40,184
  42,259
  44,487
  46,872
  49,417
  52,128
  55,010
  58,069
  61,311
  64,743
  68,374
  72,210
  76,261
  80,536
  85,044
  89,797
  94,805
  100,080
  105,633
  111,479
  117,631
  124,104
  130,912
  138,071
  145,600
  153,514
  161,834
Total liabilities, $m
  50,934
  52,564
  54,340
  56,265
  58,340
  60,568
  62,953
  65,498
  68,209
  71,091
  74,150
  77,392
  80,824
  84,455
  88,291
  92,342
  96,617
  101,125
  105,878
  110,886
  116,161
  121,714
  127,560
  133,712
  140,185
  146,993
  154,152
  161,681
  169,595
  177,915
Total equity, $m
  51,755
  53,411
  55,217
  57,172
  59,281
  61,545
  63,968
  66,554
  69,309
  72,238
  75,346
  78,640
  82,128
  85,817
  89,715
  93,831
  98,175
  102,756
  107,586
  112,674
  118,034
  123,677
  129,618
  135,869
  142,446
  149,363
  156,639
  164,288
  172,331
  180,785
Total liabilities and equity, $m
  102,689
  105,975
  109,557
  113,437
  117,621
  122,113
  126,921
  132,052
  137,518
  143,329
  149,496
  156,032
  162,952
  170,272
  178,006
  186,173
  194,792
  203,881
  213,464
  223,560
  234,195
  245,391
  257,178
  269,581
  282,631
  296,356
  310,791
  325,969
  341,926
  358,700
Debt-to-equity ratio
  0.670
  0.680
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
  0.800
  0.810
  0.820
  0.830
  0.830
  0.840
  0.850
  0.850
  0.860
  0.870
  0.870
  0.880
  0.880
  0.890
  0.890
  0.900
Adjusted equity ratio
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,928
  3,153
  3,394
  3,655
  3,937
  4,238
  4,561
  4,905
  5,271
  5,660
  10,594
  11,031
  11,494
  11,983
  12,501
  13,047
  13,623
  14,230
  14,870
  15,545
  16,255
  17,003
  17,791
  18,619
  19,490
  20,407
  21,371
  22,384
  23,450
  24,570
Depreciation, amort., depletion, $m
  13,377
  13,607
  13,858
  14,129
  14,422
  14,736
  15,073
  15,432
  15,814
  16,221
  10,460
  10,918
  11,402
  11,914
  12,455
  13,027
  13,630
  14,266
  14,936
  15,643
  16,387
  17,170
  17,995
  18,863
  19,776
  20,736
  21,746
  22,808
  23,925
  25,098
Funds from operations, $m
  16,305
  16,760
  17,252
  17,785
  18,359
  18,975
  19,634
  20,337
  21,086
  21,881
  21,054
  21,949
  22,896
  23,897
  24,956
  26,073
  27,252
  28,496
  29,807
  31,188
  32,642
  34,173
  35,785
  37,482
  39,266
  41,143
  43,117
  45,192
  47,374
  49,668
Change in working capital, $m
  48
  53
  58
  62
  67
  72
  77
  83
  88
  94
  99
  105
  111
  118
  124
  131
  139
  146
  154
  162
  171
  180
  190
  200
  210
  221
  232
  244
  257
  270
Cash from operations, $m
  16,257
  16,707
  17,194
  17,722
  18,291
  18,902
  19,556
  20,254
  20,998
  21,788
  20,955
  21,843
  22,784
  23,780
  24,831
  25,942
  27,114
  28,350
  29,652
  31,025
  32,471
  33,993
  35,596
  37,282
  39,056
  40,922
  42,885
  44,948
  47,118
  49,398
Maintenance CAPEX, $m
  -6,976
  -7,185
  -7,415
  -7,666
  -7,937
  -8,230
  -8,544
  -8,881
  -9,240
  -9,622
  -10,029
  -10,460
  -10,918
  -11,402
  -11,914
  -12,455
  -13,027
  -13,630
  -14,266
  -14,936
  -15,643
  -16,387
  -17,170
  -17,995
  -18,863
  -19,776
  -20,736
  -21,746
  -22,808
  -23,925
New CAPEX, $m
  -2,090
  -2,299
  -2,506
  -2,715
  -2,927
  -3,143
  -3,364
  -3,591
  -3,824
  -4,066
  -4,315
  -4,574
  -4,842
  -5,121
  -5,412
  -5,715
  -6,031
  -6,360
  -6,705
  -7,065
  -7,441
  -7,835
  -8,247
  -8,678
  -9,130
  -9,604
  -10,100
  -10,620
  -11,165
  -11,737
Cash from investing activities, $m
  -9,066
  -9,484
  -9,921
  -10,381
  -10,864
  -11,373
  -11,908
  -12,472
  -13,064
  -13,688
  -14,344
  -15,034
  -15,760
  -16,523
  -17,326
  -18,170
  -19,058
  -19,990
  -20,971
  -22,001
  -23,084
  -24,222
  -25,417
  -26,673
  -27,993
  -29,380
  -30,836
  -32,366
  -33,973
  -35,662
Free cash flow, $m
  7,190
  7,223
  7,273
  7,341
  7,427
  7,529
  7,648
  7,783
  7,934
  8,100
  6,611
  6,810
  7,025
  7,257
  7,505
  7,772
  8,056
  8,360
  8,682
  9,024
  9,387
  9,772
  10,179
  10,609
  11,063
  11,543
  12,048
  12,582
  13,144
  13,737
Issuance/(repayment) of debt, $m
  1,412
  1,630
  1,777
  1,925
  2,075
  2,228
  2,385
  2,545
  2,711
  2,882
  3,059
  3,242
  3,432
  3,630
  3,836
  4,051
  4,275
  4,509
  4,753
  5,008
  5,275
  5,554
  5,846
  6,152
  6,472
  6,808
  7,160
  7,528
  7,915
  8,320
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,412
  1,630
  1,777
  1,925
  2,075
  2,228
  2,385
  2,545
  2,711
  2,882
  3,059
  3,242
  3,432
  3,630
  3,836
  4,051
  4,275
  4,509
  4,753
  5,008
  5,275
  5,554
  5,846
  6,152
  6,472
  6,808
  7,160
  7,528
  7,915
  8,320
Total cash flow (excl. dividends), $m
  8,602
  8,852
  9,050
  9,266
  9,502
  9,757
  10,033
  10,328
  10,645
  10,982
  9,670
  10,052
  10,457
  10,887
  11,342
  11,823
  12,331
  12,868
  13,435
  14,032
  14,662
  15,326
  16,025
  16,761
  17,535
  18,350
  19,208
  20,110
  21,059
  22,057
Retained Cash Flow (-), $m
  -1,461
  -1,656
  -1,805
  -1,956
  -2,108
  -2,264
  -2,423
  -2,586
  -2,755
  -2,928
  -3,108
  -3,294
  -3,488
  -3,689
  -3,898
  -4,116
  -4,344
  -4,581
  -4,829
  -5,089
  -5,360
  -5,643
  -5,940
  -6,251
  -6,577
  -6,918
  -7,275
  -7,650
  -8,042
  -8,454
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  357
  367
  379
  392
  406
  421
  437
  454
  472
  492
  513
  535
  558
  583
  609
  637
  666
  697
  729
  763
  799
  837
  878
  920
  964
  1,011
  1,060
  1,111
  1,166
  1,223
Cash available for distribution, $m
  7,141
  7,196
  7,244
  7,310
  7,394
  7,494
  7,610
  7,742
  7,890
  8,054
  6,561
  6,757
  6,969
  7,198
  7,444
  7,707
  7,988
  8,287
  8,605
  8,944
  9,302
  9,682
  10,084
  10,509
  10,959
  11,433
  11,933
  12,461
  13,017
  13,602
Discount rate, %
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
  6,801
  6,496
  6,167
  5,837
  5,505
  5,170
  4,833
  4,494
  4,154
  3,815
  2,773
  2,524
  2,279
  2,039
  1,806
  1,584
  1,373
  1,176
  994
  828
  680
  549
  437
  341
  261
  196
  144
  103
  72
  50
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Medtronic plc manufactures and sells device-based medical therapies worldwide. The company’s Cardiac and Vascular Group segment offers pacemakers, implantable cardioverter defibrillators and cardiac resynchronization therapy devices, AF products, diagnostics and monitoring devices, and remote monitoring and patient-centered software; and heart valves, percutaneous coronary intervention stent products, surgical valve replacement and repair products, endovascular stent grafts, peripheral vascular intervention products, and products to treat superficial and deep venous diseases. Its Minimally Invasive Therapies Group segment provides gastrointestinal diagnostics, ablation, and interventional lung solutions; stapling, vessel sealing, and other surgical instruments; sutures; electrosurgery products; hernia mechanical devices; mesh implants; products for patient monitoring and recovery; sensors; monitors; compression and dialysis, enteral feeding, and wound care products; and operating room supplies, electrodes, needles, syringes, and sharps disposals. The company’s Restorative Therapies Group segment offers products for various areas of the spine; bone graft substitutes; biologic products; trauma, implantable neurostimulation therapies, and drug delivery systems for the treatment of chronic pain, movement disorders, obsessive-compulsive disorder, overactive bladder, urinary retention, fecal incontinence, and gastroparesis; products to treat conditions of the ear, nose, throat, and neurological disorders; systems that incorporate advanced energy surgical instruments; products for haemostatic sealing of soft tissue and bone; and image-guided surgery and intra-operative imaging systems. Its Diabetes Group segment provides insulin pumps and consumables; continuous glucose monitoring systems; and Web-based therapy management software solutions. It serves hospitals, physicians, clinicians, and patients. Medtronic plc was founded in 1949 and is headquartered in Dublin, Ireland.

FINANCIAL RATIOS  of  Medtronic (MDT)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MDT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MDT stock intrinsic value calculation we used $29710 million for the last fiscal year's total revenue generated by Medtronic. The default revenue input number comes from 2017 income statement of Medtronic. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MDT stock valuation model: a) initial revenue growth rate of 3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5%, whose default value for MDT is calculated based on our internal credit rating of Medtronic, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Medtronic.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MDT stock the variable cost ratio is equal to 81.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MDT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Medtronic.

Corporate tax rate of 27% is the nominal tax rate for Medtronic. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MDT stock is equal to 1.2%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MDT are equal to 234.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Medtronic operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MDT is equal to 5.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $50294 million for Medtronic - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1379 million for Medtronic is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Medtronic at the current share price and the inputted number of shares is $121.4 billion.

RELATED COMPANIES Price Int.Val. Rating
GMED Globus Medical 52.65 21.51  str.sell
HOLX Hologic 41.12 22.04  sell

COMPANY NEWS

▶ 3 Stocks That Could Be Added to the Dow Next   [Jul-20-18 09:21AM  Motley Fool]
▶ Medtronic invests in Twin Cities Orthopedics spinoff   [Jul-18-18 03:57PM  American City Business Journals]
▶ Is Intuitive Surgical, Inc. a Buy?   [Jul-13-18 08:16AM  Motley Fool]
▶ Top Stocks Set to Disrupt the Diabetes Market   [Jul-06-18 12:59PM  Motley Fool]
▶ Medical Device ETFs Still Look Healthy   [10:48AM  ETF Trends]
▶ 3 Stocks to Tap the Minimally-Invasive Surgery Market Boom   [Jun-28-18 02:20PM  InvestorPlace]
▶ 3 Top Healthcare Stocks to Buy Right Now   [08:51AM  Motley Fool]
▶ 5 AI Biotech Stocks to Bet On Now   [Jun-14-18 01:41PM  InvestorPlace]
▶ DexCom Stock History   [Jun-13-18 07:24PM  Motley Fool]
▶ Artificial Pancreas Lifts Tandem Diabetes   [03:41AM  Investopedia]
▶ AI And Robotics Are Taking Robotic Surgery To New Levels   [Jun-12-18 05:25PM  Investor's Business Daily]
▶ Better Buy: Intuitive Surgical, Inc. vs. Medtronic PLC   [Jun-06-18 11:45AM  Motley Fool]
▶ Medtronic: Cramer's Top Takeaways   [06:24AM  TheStreet.com]
▶ 10 Undervalued Low-Volatility Stocks   [06:00AM  Morningstar]
▶ 2 Giant Medical Device Companies Transforming Diabetes   [May-28-18 10:35AM  Motley Fool]
▶ Medtronic's Rally Doesn't Look All That Healthy   [May-25-18 01:21PM  TheStreet.com]
▶ Five Top MedTech Stocks in Diabetes   [12:40PM  Motley Fool]
▶ Company News For May 25, 2018   [10:03AM  Zacks]
▶ Medtronic Pops After Smashing Views As Diabetes Woes Soothed   [May-24-18 04:11PM  Investor's Business Daily]
▶ 3 Pros, 3 Cons to Buying Medtronic PLC Stock   [10:57AM  InvestorPlace]
▶ Medtronic: Fiscal 4Q Earnings Snapshot   [07:09AM  Associated Press]
▶ Earnings Roundup for Medtronic   [May-23-18 03:58PM  Benzinga]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.