Abbott (ABT) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

Abbott (ABT) closed at $107.53 in the latest trading session, marking a -0.57% move from the prior day. This move lagged the S&P 500's daily loss of 0.06%. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.23%.

Coming into today, shares of the maker of infant formula, medical devices and drugs had lost 3.03% in the past month. In that same time, the Medical sector gained 9.55%, while the S&P 500 gained 11.09%.

Investors will be hoping for strength from ABT as it approaches its next earnings release. On that day, ABT is projected to report earnings of $1.36 per share, which would represent year-over-year growth of 43.16%. Our most recent consensus estimate is calling for quarterly revenue of $9.92 billion, up 19.3% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.57 per share and revenue of $33.84 billion, which would represent changes of +10.19% and +6.08%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ABT. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. ABT is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that ABT has a Forward P/E ratio of 30.33 right now. This represents a discount compared to its industry's average Forward P/E of 37.07.

We can also see that ABT currently has a PEG ratio of 2.47. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Products was holding an average PEG ratio of 3.51 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 123, which puts it in the top 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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