At US$77.06, Is Medtronic plc (NYSE:MDT) Worth Looking At Closely?

Let's talk about the popular Medtronic plc (NYSE:MDT). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$87.02 and falling to the lows of US$76.84. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Medtronic's current trading price of US$77.06 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Medtronic’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Medtronic

What Is Medtronic Worth?

According to our valuation model, Medtronic seems to be fairly priced at around 8.5% below our intrinsic value, which means if you buy Medtronic today, you’d be paying a fair price for it. And if you believe that the stock is really worth $84.18, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Medtronic’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Medtronic?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 63% over the next couple of years, the future seems bright for Medtronic. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MDT’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on MDT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Medtronic at this point in time. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Medtronic.

If you are no longer interested in Medtronic, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com