U.S. markets closed
  • S&P 500

    4,134.98
    -38.44 (-0.92%)
     
  • Dow 30

    33,815.90
    -321.41 (-0.94%)
     
  • Nasdaq

    13,818.41
    -131.81 (-0.94%)
     
  • Russell 2000

    2,232.61
    -7.01 (-0.31%)
     
  • Crude Oil

    61.66
    +0.31 (+0.51%)
     
  • Gold

    1,784.00
    -9.10 (-0.51%)
     
  • Silver

    26.19
    -0.38 (-1.41%)
     
  • EUR/USD

    1.2021
    -0.0019 (-0.16%)
     
  • 10-Yr Bond

    1.5540
    -0.0100 (-0.64%)
     
  • GBP/USD

    1.3840
    -0.0092 (-0.66%)
     
  • USD/JPY

    107.9600
    -0.0830 (-0.08%)
     
  • BTC-USD

    51,476.93
    -3,645.39 (-6.61%)
     
  • CMC Crypto 200

    1,194.54
    -48.51 (-3.90%)
     
  • FTSE 100

    6,938.24
    +42.95 (+0.62%)
     
  • Nikkei 225

    29,188.17
    +679.62 (+2.38%)
     

Upgrade: Analysts Just Made A Captivating Increase To Their Abbott Laboratories (NYSE:ABT) Forecasts

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Abbott Laboratories (NYSE:ABT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 9.5% to US$124 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from Abbott Laboratories' 18 analysts is for revenues of US$42b in 2021, which would reflect a major 22% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 62% to US$4.05. Previously, the analysts had been modelling revenues of US$38b and earnings per share (EPS) of US$3.17 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Abbott Laboratories

earnings-and-revenue-growth
earnings-and-revenue-growth

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$133 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Abbott Laboratories at US$158 per share, while the most bearish prices it at US$93.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Abbott Laboratories shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Abbott Laboratories' rate of growth is expected to accelerate meaningfully, with the forecast 22% revenue growth noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Abbott Laboratories to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Abbott Laboratories.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Abbott Laboratories analysts - going out to 2025, and you can see them free on our platform here.

You can also see our analysis of Abbott Laboratories' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.