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Medtronic Inc (NYSE:MDT)
Intrinsic Value (DCF Projected)
$57.50 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Medtronic Inc's DCF projected intrinsic value is $57.50. The stock price of Medtronic Inc is $62.17. Therefore, Medtronic Inc's Price to Intrinsic Value (DCF Projected) Ratio of today is 1.1.

MDT' s 10-Year Price to Intrinsic Value (DCF Projected) Range
Min: 0.77   Max: 6.95
Current: 1.08

0.77
6.95

During the past 13 years, the highest Price to Intrinsic Value (DCF Projected) Ratio of Medtronic Inc was 6.95. The lowest was 0.77. And the median was 1.71.

MDT's Price to Intrinsic Value (DCF Projected) is ranked higher than
94% of the 416 Companies
in the Global Medical Devices industry.

( Industry Median: 17.20 vs. MDT: 1.08 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Medtronic Inc's FCF(6 year avg) is calculate as

Medtronic Inc Quarterly Data

201204201207201210201301201304201307201310201401201404201407
total_freecashflow 9341,2297861,3211,1499059181,5171,223201
200910201001201004201007201010201101201104201107201110201201
total_freecashflow 6161,3611,0486977311,0877259851,0331,034
200810200901200904200907
total_freecashflow 5491,003990471

Add all the Free Cash Flow together and divide 6 will get Medtronic Inc's FCF(6 year avg) = $3,752.17.

Medtronic Inc's DCF Projected Intrinsic Value for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jul14)*0.8)/Shares Outstanding
=(11.299371299*3752.16666667+19248*0.8)/1005.200
=57.50

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Medtronic Inc's Price to DCF Projected Intrinsic Value Ratio for today is calculated as

Price to DCF Projected Intrinsic Value=Share Price/DCF Projected Intrinsic Value
=62.17/57.4965423222
=1.08

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value (DE), Intrinsic Value (DCF), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Medtronic Inc Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
iv_dcf_share 26.7626.9630.9635.1836.0842.4443.2749.6157.7257.54

Medtronic Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
iv_dcf_share 49.6151.4452.4055.1957.7257.7859.0256.5457.5457.50
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