Abbott (ABT) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Abbott (ABT) closed the most recent trading day at $81.90, moving -1% from the previous trading session. This move lagged the S&P 500's daily loss of 0.16%. Elsewhere, the Dow lost 0.12%, while the tech-heavy Nasdaq lost 0.33%.

Heading into today, shares of the maker of infant formula, medical devices and drugs had gained 7.41% over the past month, outpacing the Medical sector's loss of 8.16% and the S&P 500's loss of 10.5% in that time.

ABT will be looking to display strength as it nears its next earnings release, which is expected to be April 16, 2020. The company is expected to report EPS of $0.62, down 1.59% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.64 billion, up 1.4% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.26 per share and revenue of $32.17 billion, which would represent changes of +0.62% and +0.84%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ABT. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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

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 has moved 9.39% lower. ABT is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, ABT is holding a Forward P/E ratio of 25.38. Its industry sports an average Forward P/E of 24.63, so we one might conclude that ABT is trading at a premium comparatively.

We can also see that ABT currently has a PEG ratio of 2.77. 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. Medical - Products stocks are, on average, holding a PEG ratio of 2.6 based on yesterday's closing prices.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 51, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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