• If you are wondering whether Medtronic's current share price reflects its true worth, this breakdown will help you weigh what you are paying against what you may be getting.
• The stock closed at US$86.19, with a 1 year return of 8.7% but a 10.3% decline year to date. These figures can change how you think about both risk and opportunity here.
• Recent headlines have focused on Medtronic's position in medical devices and its ongoing portfolio of treatments and technologies, helping shape views on how durable its business model might be. This context matters, because sentiment around product pipelines, regulation, and healthcare spending often feeds directly into how the market values established names like Medtronic.
• Right now Medtronic has a value score of 5/6. Next, you will see how different valuation methods line up with that score, and then finish with a way of thinking about valuation that goes a step further than the usual ratios and models.

Approach 1: Medtronic Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash Medtronic is expected to generate in the future and then discounts those projected cash flows back into today’s dollars to estimate what the business might be worth right now.

For Medtronic, the latest twelve month free cash flow stands at about $5.4b. Using a 2 Stage Free Cash Flow to Equity model, analysts project free cash flow of $5.8b in 2026 and $7.1b in 2028, with further estimates out to 2035 extrapolated from these inputs. All of these projections are expressed in US$ and are based on Simply Wall St’s mix of analyst estimates for the earlier years and modelled extensions for later years.

When these future cash flows are discounted back and aggregated, the model arrives at an estimated intrinsic value of about US$90.98 per share. Compared to the recent share price of US$86.19, this implies the stock is trading at roughly a 5.3% discount, which is a relatively small gap.

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 profitable companies like Medtronic, the P/E ratio is a useful shorthand for what the market is paying for each dollar of current earnings. It ties directly to what you see on the income statement, so it is a familiar and intuitive way to compare valuation across similar businesses.

What counts as a "normal" or "fair" P/E usually reflects how the market views a company’s growth potential and risk. Higher expected growth or perceived resilience can justify a higher P/E, while more uncertainty or lower growth can pull that multiple down.

Medtronic currently trades on a P/E of about 23.99x. That sits below the Medical Equipment industry average of 26.02x and well below the peer group average of 39.69x. Simply Wall St also provides a proprietary Fair Ratio of 34.13x, which is the P/E level it would expect given factors such as Medtronic’s earnings profile, profit margins, market cap, risk characteristics and its industry.

This Fair Ratio aims to be more tailored than a simple comparison with industry and peers, because it adjusts for company specific attributes rather than assuming all players in the group deserve similar multiples. Set against this 34.13x Fair Ratio, Medtronic’s actual 23.99x P/E indicates that the shares may be undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Medtronic Narrative

Earlier it was mentioned that there is an even better way to think about valuation, and that is where Narratives come in, giving you a simple story driven framework that connects your view on Medtronic’s products, competition and risks to a set of concrete forecasts for revenue, earnings, margins and ultimately a fair value that can be compared with the current share price.

On Simply Wall St’s Community page, Narratives let you set out this story directly in the platform so that your assumptions sit alongside the hard numbers. The fair value you see is then updated automatically when new information such as earnings, guidance or news is added.

For Medtronic, one investor Narrative on the platform currently points to a fair value of about US$82.66 per share. Another points to about US$109.08, showing how two people can look at the same company, weigh factors like the Hugo robotic system, diabetes competition or margin targets differently, and land on very different views of what the stock is worth today.

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

These examples sit on opposite sides of the value debate, so you can quickly see how different assumptions around products, regulation and competition translate into very different fair values.

Fair value: US$95.00 per share

Implied discount to fair value: about 9.3% using the narrative fair value and the recent US$86.19 share price

Revenue growth assumption: 5.15%

• Diverse product mix across Cardiovascular, Medical Surgical, Neuroscience and Diabetes, which reduces reliance on any single segment and compares with more focused peers.
• Heavy R&D spend of about US$2.7b and a long dividend track record are central to the case that Medtronic combines product development with income appeal.
• Key watchpoints are diabetes competition, regulatory and recall risk, supply chain pressures and the need to execute on robotics and AI partnerships.

Fair value: US$82.66 per share

Implied premium to fair value: about 4.3% using the narrative fair value and the recent US$86.19 share price

Revenue growth assumption: 4.58%

• Emphasises tough competition across cardiovascular, diabetes, surgical robotics and neurology, along with regulatory complexity and supply chain challenges.
• Sees Medtronic as a large, diversified player with cash flow and dividends, but with slower organic growth and exposure to currency and mature markets.
• Identifies success of new device rollouts, margin trends and progress in emerging markets as key signals that could shift the risk reward balance.

If you want to go further than these previews and see the full reasoning, assumptions and numbers behind each story, you can review the complete bull and bear cases for Medtronic on the Community page and even create your own narrative that matches how you see the company.

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Medtronic on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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.