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

Zacks Equity Research
·3-min read

Abbott (ABT) closed at $106.21 in the latest trading session, marking a +0.73% move from the prior day. This change lagged the S&P 500's 0.95% gain on the day. Meanwhile, the Dow gained 0.64%, and the Nasdaq, a tech-heavy index, added 0.23%.

Coming into today, shares of the maker of infant formula, medical devices and drugs had lost 6.85% in the past month. In that same time, the Medical sector lost 3.97%, while the S&P 500 lost 3.49%.

Investors will be hoping for strength from Abbott as it approaches its next earnings release. The company is expected to report EPS of $1.11, down 5.13% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.36 billion, up 1.35% from the year-ago period.

ABT's full-year Zacks Consensus Estimates are calling for earnings of $4.83 per share and revenue of $41.62 billion. These results would represent year-over-year changes of -7.29% and -3.38%, respectively.

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Investors might also notice recent changes to analyst estimates for Abbott. 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. 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.61% higher. Abbott is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Abbott currently has a Forward P/E ratio of 21.84. Its industry sports an average Forward P/E of 20.45, so we one might conclude that Abbott is trading at a premium comparatively.

It is also worth noting that ABT currently has a PEG ratio of 3.82. 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. The Medical - Products was holding an average PEG ratio of 1.37 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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