Medtronic plc manufactures and sells device-based medical therapies worldwide. The company operates in four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group and Diabetes Group. The company was founded in 1949 and is based in Dublin, Ireland.
MDT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MDT, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Medtronic plc ranked in the 22th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. In terms of the factors that were most noteworthy in this DCF analysis for MDT, they are:
MDT's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 25.52% of tickers in our DCF set.
Medtronic plc's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than just 0% of US stocks with positive free cash flow.
The weighted average cost of capital for the company is 8. This value is greater than merely 19.06% stocks in the Healthcare sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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The U.S. Department of Justice is investigating if acquisitions by Medtronic (MDT) limited competition in ventilator manufacturing, WSJ reports, which adds that the company has received a civil subpoena from the DoJ requesting more information.The probe reportedly is centered on two acquisitions: when Covidien PLC, a device maker that sold...