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

Zacks Equity Research

Abbott (ABT) closed at $83.87 in the latest trading session, marking a -1.88% move from the prior day. This change lagged the S&P 500's 0.32% loss on the day. At the same time, the Dow lost 0.38%, and the tech-heavy Nasdaq lost 0.4%.

Prior to today's trading, shares of the maker of infant formula, medical devices and drugs had gained 2.51% over the past month. This has lagged the Medical sector's gain of 6.71% and traded in line with the S&P 500.

Investors will be hoping for strength from ABT as it approaches its next earnings release. The company is expected to report EPS of $0.95, up 17.28% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.26 billion, up 6.41% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.24 per share and revenue of $31.88 billion, which would represent changes of +12.5% and +4.25%, 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. ABT is currently a Zacks Rank #3 (Hold).

In terms of valuation, ABT is currently trading at a Forward P/E ratio of 26.35. This represents a discount compared to its industry's average Forward P/E of 26.57.

Also, we should mention that ABT has a PEG ratio of 2.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - Products industry currently had an average PEG ratio of 2.53 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 137, which puts it in the bottom 47% 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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