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

Zacks Equity Research

In the latest trading session, Abbott (ABT) closed at $83.36, marking a -1.08% move from the previous day. This move lagged the S&P 500's daily loss of 0.31%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.28%.

Prior to today's trading, shares of the maker of infant formula, medical devices and drugs had gained 0.39% over the past month. This has outpaced the Medical sector's loss of 0.98% and lagged the S&P 500's gain of 2.92% in that time.

ABT will be looking to display strength as it nears its next earnings release. On that day, ABT is projected to report earnings of $0.84 per share, which would represent year-over-year growth of 12%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.10 billion, up 5.81% from the year-ago period.

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 +12.56% and +4.43%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ABT. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. ABT is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note ABT's current valuation metrics, including its Forward P/E ratio of 26. This valuation marks a discount compared to its industry's average Forward P/E of 26.69.

It is also worth noting that ABT currently has a PEG ratio of 2.37. 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 industry currently had an average PEG ratio of 2.5 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 77, which puts it in the top 31% 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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