• If you are wondering whether Medtronic is offering good value right now, it helps to look past the headlines and focus on what the numbers are actually saying about the stock.
• The share price closed at US$90.90, with returns of a 6.9% decline over 7 days, a 10.7% decline over 30 days, a 5.4% decline year to date, a 0.8% decline over 1 year, a 30.7% gain over 3 years and an 11.1% decline over 5 years. Taken together, this gives you a mixed picture of how the market has been reassessing the company over different timeframes.
• Recent news coverage has focused on Medtronic's position as a large medical technology company and how it fits into broader discussions about healthcare demand and medical devices. This context helps explain why the stock can experience periods of renewed interest followed by pullbacks as expectations around growth, regulation and product pipelines change over time.
• On our valuation checks, Medtronic scores 5 out of 6, giving it a value score of 5. Next, we will look at how different valuation approaches stack up for the stock before finishing with a way to assess value that brings all these pieces together.

Approach 1: Medtronic Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes expected future cash flows, then discounts them back to today to estimate what the business might be worth right now. It is essentially asking what those future dollars are worth in present terms.

For Medtronic, the latest twelve month Free Cash Flow is about $5.44b. Analysts provide explicit forecasts for the next few years, and beyond that Simply Wall St extrapolates cash flows using its 2 Stage Free Cash Flow to Equity model. In this framework, Medtronic's projected Free Cash Flow for 2035 is about $8.96b, with a series of annual projections between now and then, all expressed in US$.

When these projected cash flows are discounted back to today, the model estimates an intrinsic value of about $94.02 per share. Compared with the recent share price of $90.90, this implies the stock is around 3.3% undervalued, which is a relatively small gap and well within the sort of margin that can move with new information.

Result: ABOUT RIGHT

Medtronic is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Medtronic Price vs Earnings

For a profitable company like Medtronic, the P/E ratio is a useful way to gauge what investors are currently willing to pay for each dollar of earnings, which helps you compare it with similar businesses.

What counts as a "normal" P/E will usually reflect how the market views a company’s growth prospects and risks. Higher expected growth or lower perceived risk can support a higher multiple, while slower growth or higher uncertainty tends to justify a lower one.

Medtronic is trading on a P/E of 25.3x. That sits below the Medical Equipment industry average of about 27.6x and well below the peer group average of 42.4x. Simply Wall St also calculates a Fair Ratio for Medtronic of 37.9x, which is the P/E level it would expect given factors like earnings growth, profit margins, industry, market cap and risk profile.

This Fair Ratio is more tailored than a simple comparison with peers or the industry, because it adjusts for company specific factors rather than assuming all firms deserve the same multiple. Compared with Medtronic’s current 25.3x, the Fair Ratio of 37.9x suggests the shares are trading below that model based assessment.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Medtronic Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about Medtronic linked directly to numbers like future revenue, earnings, margins and your own fair value estimate.

On Simply Wall St’s Community page, investors create Narratives that tie together what they think about Medtronic’s product pipeline, competition and risks with a full forecast and a clear Fair Value number. They then compare that Fair Value with the current share price to help decide whether the stock looks expensive or cheap on their assumptions.

These Narratives update when new information such as earnings, guidance changes or news comes through, so your fair value view is not fixed. It adjusts as the Medtronic story evolves.

For example, one Medtronic Narrative on the platform currently puts fair value at about US$111.74 per share, another at US$111.69, another at US$95.00 and another at US$82.66. This shows how different investors can look at the same company and, based on their own expectations for growth, margins and risk, arrive at very different conclusions about what the shares are worth today.

For Medtronic however we'll make it really easy for you with previews of two leading Medtronic Narratives:

Together, they show how investors can look at the same company, the same products and the same headlines, yet reach very different conclusions about what the shares are worth.

Fair value in this bull case: US$95.00 per share

Gap to this fair value compared with the last close of US$90.90: about 4.3% undervalued using this author’s assumptions

Revenue growth used in the model: 5.15%

• Focuses on Medtronic’s breadth across cardiovascular, medical surgical, neuroscience and diabetes, arguing that this diversification and scale help support earnings quality over time.
• Highlights heavy R&D spend of about US$2.7b and a pipeline that includes the Hugo robotic assisted surgery system, the MiniMed 780G insulin pump and recent U.S. regulatory approvals as support for the investment case.
• Points to strong cash generation, a long dividend track record and a P/E that the author views as attractive compared with medical device peers, while still flagging product recall, competition and regulatory risks.

Fair value in this bear case: US$82.66 per share

Gap to this fair value compared with the last close of US$90.90: about 10.0% overvalued using this author’s assumptions

Revenue growth used in the model: 4.58%

• Accepts Medtronic’s scale and reach in medical devices but stresses that the company still faces intense competition in cardiovascular, diabetes, surgical technologies and neurology, which could affect pricing and growth.
• Emphasises ongoing risks around regulation, supply chains, product recalls, reimbursement and currency, even with support from trends like aging populations and rising demand for medical technology.
• Views the stock as a moderate growth and income option, but argues that the current price already reflects much of the expected progress, so execution on new products, margins and emerging market expansion is critical.

Do you think there's more to the story for Medtronic? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.