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

Zacks Equity Research

Abbott (ABT) closed the most recent trading day at $86.93, moving -0.15% from the previous trading session. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, added 0.05%.

Prior to today's trading, shares of the maker of infant formula, medical devices and drugs had gained 3.29% over the past month. This has lagged the Medical sector's gain of 5.44% and outpaced the S&P 500's gain of 2.48% in that time.

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, the Zacks Consensus Estimate for revenue is projecting net sales of $8.26 billion, up 6.41% 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 $31.88 billion. These totals would mark changes of +12.5% and +4.25%, respectively, from last year.

Any recent changes to analyst estimates for ABT should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ABT currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ABT has a Forward P/E ratio of 26.83 right now. For comparison, its industry has an average Forward P/E of 27.58, which means ABT is trading at a discount to the group.

Investors should also note that ABT has a PEG ratio of 2.51 right now. 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. Medical - Products stocks are, on average, holding a PEG ratio of 2.69 based on yesterday's closing prices.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 37% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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