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Abbott (ABT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Abbott (ABT) closed the most recent trading day at $83.69, moving +0.88% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.38%. Meanwhile, the Dow lost 0.04%, and the Nasdaq, a tech-heavy index, added 0.73%.

Heading into today, shares of the maker of infant formula, medical devices and drugs had gained 9.63% over the past month, outpacing the Medical sector's gain of 2.33% and the S&P 500's gain of 3.19% in that time.

Wall Street will be looking for positivity from ABT as it approaches its next earnings report date. This is expected to be July 17, 2019. In that report, analysts expect ABT to post earnings of $0.80 per share. This would mark year-over-year growth of 9.59%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.99 billion, up 2.82% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.22 per share and revenue of $31.92 billion. These totals would mark changes of +11.81% and +4.4%, respectively, from last year.

Any recent changes to analyst estimates for ABT should also be noted by investors. These revisions help to show the ever-changing nature of 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection remained stagnant. ABT is currently a Zacks Rank #3 (Hold).

Investors should also note ABT's current valuation metrics, including its Forward P/E ratio of 25.79. For comparison, its industry has an average Forward P/E of 26.14, which means ABT is trading at a discount to the group.

It is also worth noting that ABT currently has a PEG ratio of 2.33. 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. ABT's industry had an average PEG ratio of 2.44 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 95, which puts it in the top 38% 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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