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Abbott (ABT) Gains But Lags Market: What You Should Know

Zacks Equity Research

Abbott (ABT) closed at $81.97 in the latest trading session, marking a +1.11% move from the prior day. This change lagged the S&P 500's 1.42% gain on the day. At the same time, the Dow added 1.42%, and the tech-heavy Nasdaq gained 1.4%.

Coming into today, shares of the maker of infant formula, medical devices and drugs had lost 5.62% in the past month. In that same time, the Medical sector lost 2.31%, while the S&P 500 gained 0.38%.

ABT will be looking to display strength as it nears its next earnings release, which is expected to be October 16, 2019. On that day, ABT is projected to report earnings of $0.84 per share, which would represent 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.

ABT's full-year Zacks Consensus Estimates are calling for earnings of $3.24 per share and revenue of $31.93 billion. These results would represent year-over-year changes of +12.5% and +4.43%, respectively.

Investors should also note any recent changes to analyst estimates for ABT. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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).

Looking at its valuation, ABT is holding a Forward P/E ratio of 25.01. This represents a discount compared to its industry's average Forward P/E of 25.71.

Investors should also note that ABT has a PEG ratio of 2.28 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. The Medical - Products was holding an average PEG ratio of 2.52 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 72, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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