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

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Abbott (ABT - Free Report) closed the most recent trading day at $104.41, moving +1.83% from the previous trading session. This move lagged the S&P 500's daily gain of 2.45%. Meanwhile, the Dow gained 2.15%, and the Nasdaq, a tech-heavy index, added 0.18%.

Prior to today's trading, shares of the maker of infant formula, medical devices and drugs had lost 10.87% over the past month. This has lagged the Medical sector's loss of 7.42% and the S&P 500's loss of 5.71% in that time.

Wall Street will be looking for positivity from Abbott as it approaches its next earnings report date. On that day, Abbott is projected to report earnings of $1.11 per share, which would represent a year-over-year decline of 5.13%. Our most recent consensus estimate is calling for quarterly revenue of $10.36 billion, up 1.35% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.83 per share and revenue of $41.62 billion. These totals would mark changes of -7.29% and -3.38%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Abbott. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 1.61% higher within the past month. Abbott is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Abbott is currently trading at a Forward P/E ratio of 21.24. This represents a premium compared to its industry's average Forward P/E of 20.18.

Investors should also note that ABT has a PEG ratio of 3.71 right now. 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 1.36 at yesterday's closing price.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 179, which puts it in the bottom 30% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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