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

Zacks Equity Research

Abbott (ABT) closed the most recent trading day at $83.19, moving -1.22% from the previous trading session. This change lagged the S&P 500's 0.03% gain on the day. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq lost 0.04%.

Coming into today, shares of the maker of infant formula, medical devices and drugs had lost 0.49% in the past month. In that same time, the Medical sector lost 1.69%, while the S&P 500 gained 2.25%.

ABT will be looking to display strength as it nears its next earnings release. In that report, analysts expect ABT to post earnings of $0.84 per share. This would mark year-over-year growth of 12%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.10 billion, up 5.81% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.24 per share and revenue of $31.93 billion, which would represent changes of +12.5% and +4.43%, respectively, from the prior year.

Any recent changes to analyst estimates for ABT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. ABT is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, ABT is holding a Forward P/E ratio of 25.98. Its industry sports an average Forward P/E of 26.97, so we one might conclude that ABT is trading at a discount comparatively.

Also, we should mention that ABT has a PEG ratio of 2.37. 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 2.48 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 69, putting it in the top 27% 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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