Medtronic Plc

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
William Blair	Ben Andrew	bandrew@williamblair.com
Piper Jaffray	Brooks E. West	brooks.e.west@pjc.com
SunTrust Robinson Humphrey	Bruce Nudell	bruce.nudell@suntrust.com
Leerink Partners	Danielle Antalffy	danielle.antalffy@leerink.com
RBC Capital Markets	Glenn Novarro	glenn.novarro@rbccm.com
BMO Capital Markets	Joanne K. Wuensch	joanne.wuensch@bmo.com
Cowen & Company	Joshua Jennings	josh.jennings@cowen.com
Deutsche Bank Research	Kristen Stewart	kristen.stewart@db.com
Wells Fargo Securities	Larry Biegelsen	lawrence.biegelsen@wellsfargo.com
Credit Suisse	Matthew Keeler	matthew.keeler@credit-suisse.com
Needham	Mike Matson	mmatson@needhamco.com
Jefferies	Raj Denhoy	rdenhoy@jefferies.com
Stifel Nicolaus	Rick Wise	wiser@stifel.com
BTIG	Sean Lavin	slavin@btig.com
Oppenheimer	Steven Lichtman	steven.lichtman@opco.com
Wedbush Securities	Tao Levy	tao.levy@wedbush.com
Evercore ISI	Vijay Kumar	vijay.kumar@evercoreisi.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	3,073	3,930	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	4,893	5,086	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	319	93	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	94,279	86,206	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	3.26%	4.56%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	51,896	(5,171)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	1,688.66%	-131.59%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	11.28%	11.21%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	7.72%	7.37%
Enterprise value	EV_Market	120,707	125,018	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	128,660	118,471
Long-Run Growth	g = IR x ROIC	55.04%	-6.00%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	23.34%	20.67%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	21.64%	32.43%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	5.96	4.27	39.91%	25.98%	30.72%	19.59%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	20.00	13.97	39.91%	25.98%	30.72%	19.59%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	39.28	31.81	39.91%	25.98%	30.72%	19.59%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	24.67	24.58	39.91%	25.98%	30.72%	19.59%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	35.53	20.68	39.91%	25.98%	30.72%	19.59%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	1.28	1.45	39.91%	25.98%	30.72%	19.59%

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