Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Medtronic plc's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.8% to 5.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 68, DPO 80, DIO 168). At a 7.0% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 21.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $166.10 per share, suggesting MDT is undervalued by 88.9% at the current price of $87.94.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 8,030 | 8,579 | 9,022 | 9,608 | 10,116 | 10,369 |
| (−) Net Interest | 814 | 869 | 914 | 973 | 1,025 | 1,050 |
| (+) D&A | 1,526 | 1,601 | 1,697 | 1,794 | 1,891 | 1,938 |
| EBITDA | 10,369 | 11,049 | 11,633 | 12,376 | 13,032 | 13,358 |
| (−) Tax | 1,358 | 1,451 | 1,526 | 1,625 | 1,711 | — |
| (−) CapEx | 1,731 | 1,849 | 1,945 | 2,071 | 2,181 | — |
| (−) ΔWC | 168 | 663 | 536 | 709 | 614 | — |
| Free Cash Flow (FCF) | 7,112 | 7,085 | 7,626 | 7,971 | 8,526 | — |
| Peers' EBITDA Multiple | 21.9x | |||||
| Terminal Value | 292,277 | |||||
| WACC / Discount Rate | 7.01% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 6,875 | 6,401 | 6,438 | 6,288 | 6,286 | 208,313 |
| Enterprise Value | 240,601 | |||||
| Projection Period | 32,289 | 13.4% | ||||
| Terminal Value | 208,313 | 86.6% | ||||
| (−) Current Net Debt | 26,298 | |||||
| Equity Value | 214,303 | |||||
| (÷) Outstanding Shares | 1290M | |||||
| Fair Price | $166 | +88.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 17.9x | 19.9x | 21.9x | 23.9x | 25.9x |
|---|---|---|---|---|---|
| 5.0% | $151 | $167 | $183 | $199 | $216 |
| 6.0% | $144 | $159 | $174 | $190 | $205 |
| 7.0% | $137 | $151 | $166 | $181 | $196 |
| 8.0% | $130 | $144 | $158 | $172 | $186 |
| 9.0% | $124 | $137 | $151 | $164 | $178 |
Current price: $87.94. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.