How Regulatory Wins Are Shaping Medtronic’s Valuation in 2025

If you’ve been weighing what to do with Medtronic stock lately, you’re not alone. Although it’s been a bit of a rollercoaster over the past month, down 0.8% in the last 30 days, there’s plenty to catch the eye for the longer-term investor. Year to date, Medtronic is up a notable 17.4%, outpacing what many would expect for a global medical device giant. Some of this positive movement comes in the context of news swirling around the company. Recent regulatory wins in the US and Europe for several new devices have renewed confidence in Medtronic’s innovation pipeline, and investors seem to be taking notice. There’s always chatter about risk whenever large healthcare firms release novel technologies, but these recent approvals appear to have reassured the market rather than spooked it.

On a valuation front, things get even more interesting. Medtronic currently hits 4 out of 6 key undervaluation checks, signaling there’s still some room for the stock to run, at least by conventional standards. So, is this the moment to make a move, or is caution still the name of the game? Next, we’ll break down how Medtronic stacks up across different valuation approaches, so stick around because there’s an even sharper way to look at value that you won’t want to miss.

Medtronic delivered 6.9% returns over the last year. See how this stacks up to the rest of the Medical Equipment industry.

Approach 1: Medtronic Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today's dollars. For Medtronic, this process starts with the company's current Free Cash Flow, which stands at $5.4 billion over the last twelve months. Analysts forecast steady growth, with cash flow estimates increasing to $6.9 billion by 2028. Beyond this point, projections are extrapolated, and Simply Wall St models anticipate Free Cash Flow reaching nearly $9.8 billion by 2035.

Based on these projections and discounting future values back at an appropriate rate, the DCF model produces an intrinsic value of $103.06 per share. This figure implies the stock is currently trading at an 8.6% discount relative to its calculated worth, suggesting Medtronic is just about fairly priced at today's levels.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Medtronic.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Medtronic's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Medtronic Price vs Earnings

The Price-to-Earnings (PE) ratio is a favored metric for valuing profitable companies like Medtronic because it directly links the share price to its underlying earnings. This makes it especially useful when a company's profits are stable and growing, as is the case here.

Growth expectations and risk play a pivotal role in shaping what a "normal" or "fair" PE ratio should be. Fast-growing companies typically command higher PE ratios, reflecting investor optimism about future profits, while companies facing more uncertainty or slower growth tend to have lower PE ratios.

Currently, Medtronic trades at a PE ratio of 25.9x. This is below both the industry average of 30.2x and the peer group average of 47.9x, suggesting a more conservative price tag compared to similar companies in the medical equipment sector.

However, not all companies in an industry are created equal. That is where Simply Wall St’s "Fair Ratio" comes in. This proprietary metric calculates the PE ratio Medtronic deserves based on its unique blend of earnings growth, profit margins, industry dynamics, market size and specific risks.

By considering these nuanced factors, the Fair Ratio of 27.9x offers a more tailored benchmark than generic industry averages or peer comparisons. Looking at where Medtronic stands, its actual PE ratio of 25.9x is just a touch below the Fair Ratio, indicating the stock is priced about right relative to what it truly deserves in today’s market.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Medtronic Narrative

Earlier, we mentioned that there’s an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal story behind the numbers, a way to tie together what you believe about Medtronic’s future, why you believe it, and what that means for your fair value estimate. Narratives let you combine your perspective on revenue growth, profit margins, and risks with your own fair value calculation, making your investment decision both data-driven and meaningfully personal.

On Simply Wall St’s Community page, Narratives are an easy, accessible tool used by millions of investors to link the company’s story with a financial forecast and fair value estimate, all in one place. With Narratives, you can see how your fair value compares to Medtronic’s current price, helping you confidently decide if it’s time to buy, hold, or sell. Best of all, these Narratives update automatically when fresh news or earnings are released, so you’re always in sync with the latest information.

For example, one investor’s Narrative on Medtronic projects robust growth in robotics and international markets, resulting in a fair value of $105 per share. Another highlights risks in the Diabetes segment and margin pressure, arriving at a more conservative $82 fair value. By exploring Narratives, you get a complete, evolving picture of where Medtronic stands and why, straight from real investors like you.

Do you think there's more to the story for Medtronic? Create your own Narrative to let the Community know!

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.

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