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

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Abbott (ABT - Free Report) closed at $109.49 in the latest trading session, marking a +0.74% move from the prior day. This move lagged the S&P 500's daily gain of 1.5%. Meanwhile, the Dow gained 1.12%, and the Nasdaq, a tech-heavy index, added 0.32%.

Heading into today, shares of the maker of infant formula, medical devices and drugs had lost 5.23% over the past month, lagging the Medical sector's loss of 0.3% and outpacing the S&P 500's loss of 6.54% in that time.

Abbott will be looking to display strength as it nears its next earnings release, which is expected to be July 20, 2022. The company is expected to report EPS of $1.10, down 5.98% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.39 billion, up 1.6% from the year-ago period.

ABT's full-year Zacks Consensus Estimates are calling for earnings of $4.81 per share and revenue of $41.69 billion. These results would represent year-over-year changes of -7.68% and -3.22%, respectively.

It is also important to note the recent changes to analyst estimates for Abbott. 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.

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. Within the past 30 days, our consensus EPS projection has moved 1.25% higher. Abbott is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Abbott currently has a Forward P/E ratio of 22.58. This represents a premium compared to its industry's average Forward P/E of 21.02.

Also, we should mention that ABT has a PEG ratio of 3.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ABT's industry had an average PEG ratio of 1.44 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 33% 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.

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