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

Zacks Equity Research

Abbott (ABT) closed at $84.37 in the latest trading session, marking a -0.62% move from the prior day. This change lagged the S&P 500's daily loss of 0.05%. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq lost 0.36%.

Heading into today, shares of the maker of infant formula, medical devices and drugs had lost 4.17% over the past month, lagging the Medical sector's loss of 0.28% and the S&P 500's loss of 1.58% in that time.

Investors will be hoping for strength from ABT as it approaches its next earnings release. In that report, analysts expect ABT to post earnings of $0.84 per share. This would mark year-over-year growth of 12%. Meanwhile, our latest consensus estimate is calling for revenue of $8.10 billion, up 5.81% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.24 per share and revenue of $31.93 billion. These totals would mark changes of +12.5% and +4.43%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for ABT. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ABT is currently a Zacks Rank #3 (Hold).

In terms of valuation, ABT is currently trading at a Forward P/E ratio of 26.19. Its industry sports an average Forward P/E of 28.53, so we one might conclude that ABT is trading at a discount comparatively.

Also, we should mention that ABT has a PEG ratio of 2.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ABT's industry had an average PEG ratio of 2.46 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ABT in the coming trading sessions, be sure to utilize Zacks.com.


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