Medtronic: A Turnaround In 4 Steps


  • Medtronic has underperformed the market considerably over the last seven years.
  • The company realized that it’s not working and initiated a turnaround strategy.
  • The turnaround can be categorized into four steps.
  • Shares have fallen 33% since the highs, but still aren’t attractive enough given the execution risks.

Medtronic office in Pointe-Claire, QC, Canada.


Medtronic plc (NYSE:MDT), a leading medical developer and manufacturer of medical devices in the Diabetes, Cadiovascular, Neuroscience and Medical Surgery spaces, is in the midst of a transformation aimed at improving its operations and financial performance. Over the last seven years, the company

Medtronic past underperformance

Medtronic past underperformance (Koyfin)

Improvements in Capital Allocation

Improvements in Capital Allocation (Medtronic at JP Morgan Healthcare conference)

MDT buybacks track record

MDT buybacks track record (Koyfin)

MDT Operating Model

MDT Operating Model (MDT Investor Handout)

A new mission statement

A new mission statement (Medtronic Investor Handout)

Medtronic short-term incentives

Medtronic short-term incentives (Medtronic Investor Handout)

Medtronic long-term incentives

Medtronic long-term incentives (Medtronic Investor Handout)

Total Shareholder Return expectation

Total Shareholder Return expectation (Medtronic Investor Handout)

MDT Inverse DCF Analysis

MDT Inverse DCF Analysis (Authors Model)

Disclosure: I/we have a beneficial long position in the shares of DHR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This is not financial advice.

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