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


Abbott (ABT) closed the most recent trading day at $69.33, moving +1.39% from the previous trading session. The stock lagged the S&P 500′s daily gain of 1.42%. Elsewhere, the Dow gained 1.15%, while the tech-heavy Nasdaq added 2.29%.

Coming into today, shares of the maker of infant formula, medical devices and drugs had lost 0.18% in the past month. In that same time, the Medical sector lost 5.63%, while the S&P 500 lost 5.36%.

Investors will be hoping for strength from ABT as it approaches its next earnings release, which is expected to be October 17, 2018. The company is expected to report EPS of $0.74, up 12.12% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.67 billion, up 12.25% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.88 per share and revenue of $30.78 billion, which would represent changes of +15.2% and +12.36%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for ABT. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. ABT is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ABT is holding a Forward P/E ratio of 23.72. This represents a discount compared to its industry’s average Forward P/E of 25.22.

It is also worth noting that ABT currently has a PEG ratio of 1.91. 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 industry currently had an average PEG ratio of 2.32 as of yesterday’s close.

The Medical – Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 107, putting it in the top 42% 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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