Investors Appear Satisfied With Medtronic Plc's (NYSE:MDT) Prospects
Investors Appear Satisfied With Medtronic Plc's (NYSE:MDT) Prospects
With a price-to-earnings (or "P/E") ratio of 25x Medtronic plc (NYSE:MDT) may be sending very bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 16x and even P/E's lower than 9x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
Recent times have been pleasing for Medtronic as its earnings have risen in spite of the market's earnings going into reverse. It seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Want the full picture on analyst estimates for the company? Then our free report on Medtronic will help you uncover what's on the horizon.Is There Enough Growth For Medtronic?
In order to justify its P/E ratio, Medtronic would need to produce outstanding growth well in excess of the market.
Taking a look back first, we see that the company managed to grow earnings per share by a handy 3.4% last year. The latest three year period has also seen an excellent 47% overall rise in EPS, aided somewhat by its short-term performance. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 13% each year over the next three years. With the market only predicted to deliver 10% per annum, the company is positioned for a stronger earnings result.
With this information, we can see why Medtronic is trading at such a high P/E compared to the market. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Bottom Line On Medtronic's P/E
Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that Medtronic maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.
Many other vital risk factors can be found on the company's balance sheet. You can assess many of the main risks through our free balance sheet analysis for Medtronic with six simple checks.
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
由於市盈率(或 “市盈率”)爲25倍,美敦力集團(紐約證券交易所代碼:MDT)目前可能會發出非常看跌的信號,因爲美國幾乎有一半的公司的市盈率低於16倍,甚至市盈率低於9倍也並不罕見。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率如此之高。
最近令美敦力感到高興,因爲儘管市場收益出現逆轉,但其收益卻有所增加。看來許多人預計該公司將繼續克服更廣泛的市場逆境,這增加了投資者購買股票的意願。你真的希望如此,否則你會無緣無故地付出相當大的代價。
想全面了解分析師對公司的估計嗎?然後,我們關於美敦力的免費報告將幫助您發現即將發生的事情。美敦力有足夠的增長嗎?
爲了證明其市盈率是合理的,美敦力需要實現遠遠超過市場的出色增長。
首先回顧一下,我們發現該公司去年成功地將每股收益增長了3.4%。在最近三年中,每股收益總體增長了47%,這在一定程度上得益於其短期表現。因此,可以公平地說,該公司最近的收益增長非常好。
展望未來,報道該公司的分析師的估計表明,未來三年收益將每年增長13%。由於預計市場年增長率僅爲10%,因此該公司有望實現更強勁的盈利業績。
有了這些信息,我們可以明白爲什麼美敦力的市盈率與市場相比如此之高。顯然,股東們並不熱衷於轉移可能着眼於更繁榮未來的東西。
美敦力市盈率的底線
通常,在做出投資決策時,我們會謹慎行事,不要過多地閱讀市盈率,儘管這可以充分揭示其他市場參與者對公司的看法。
我們已經確定,美敦力之所以維持高市盈率,是因爲其預測的增長將高於整個市場,正如預期的那樣。在現階段,投資者認爲,收益惡化的可能性不足以證明降低市盈率是合理的。在這種情況下,很難看到股價在不久的將來會強勁下跌。
在公司的資產負債表上可以找到許多其他重要的風險因素。您可以通過我們對美敦力的免費資產負債表分析,通過六張簡單的檢查來評估許多主要風險。
當然,通過尋找一些優秀的候選人,你可能會找到一筆不錯的投資。因此,來看看這份增長記錄強勁、市盈率低的公司的免費名單吧。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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