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Undervalued Medtronic Looks Like a Healthy Buy

The wide-moat medical device firm is well-positioned to leverage value-based reimbursement and risk-based contracts.


Debbie Wang: One name we'd like to highlight right now is Medtronic, which has a wide economic moat, medium uncertainty, and shares are currently trading at roughly a 16% discount to our fair value estimate. This is a company that we think is particularly well-positioned to leverage the shift to value-based reimbursement and the risk-based contracts that its hospital customers are particularly interested in.

There are several reasons for this. First is the breadth of products. Medtronic covers everything from cardiac rhythm management devices to insulin pumps. So, it can cover a whole number of therapeutic areas.

Debbie Wang does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.