Medtronic Valuation and Expected Returns Commentary

22 days ago

Anthony Schiavone

"Let's talk valuation here. How will Medtronic's stock do over the next five years and how safe is it? Keeping in mind, a ten is a sure thing, a one is a lottery ticket. I'm going to 10-15% annualized returns with a safety score of eight. That's because Medtronic trades at about 17-18 times earnings, which equates to an earnings yield of about 5.5% and management expects to grow earnings per share in fiscal year 27 at a high single digit rate. That comfortably gets you into that double digit expected return range before even accounting for potential multiple expansion, which the stock still trades at a discount, too. I think that adds to the safety score of eight as well."

The speaker provides a detailed commentary on Medtronic's valuation fundamentals, noting its attractive earnings multiple and expected EPS growth that could yield 10-15% annualized returns over the next five years. The discussion highlights the company's discount relative to historical levels and implies a bullish long-term outlook despite underlying sector challenges.

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