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

Zacks Equity Research

Abbott (ABT) closed at $87.45 in the latest trading session, marking a -1.14% move from the prior day. This move lagged the S&P 500's daily loss of 1.05%. At the same time, the Dow lost 0.78%, and the tech-heavy Nasdaq lost 1.79%.

Prior to today's trading, shares of the maker of infant formula, medical devices and drugs had lost 2.5% over the past month. This has lagged the Medical sector's loss of 0.34% and the S&P 500's gain of 1.5% in that time.

Wall Street will be looking for positivity from ABT as it approaches its next earnings report date. On that day, ABT is projected to report earnings of $0.70 per share, which would represent year-over-year growth of 11.11%. Meanwhile, our latest consensus estimate is calling for revenue of $7.98 billion, up 5.86% from the prior-year quarter.

ABT's full-year Zacks Consensus Estimates are calling for earnings of $3.60 per share and revenue of $33.67 billion. These results would represent year-over-year changes of +11.11% and +5.54%, respectively.

It is also important to note the recent changes to analyst estimates for ABT. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, 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. The Zacks Consensus EPS estimate has moved 0.36% lower within the past month. 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 24.59 right now. For comparison, its industry has an average Forward P/E of 26.88, which means ABT is trading at a discount to the group.

We can also see that ABT currently has a PEG ratio of 2.33. 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 2.74 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 56, putting it in the top 22% 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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