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Abbott (ABT) Stock Sinks As Market Gains: Here's Why

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The most recent trading session ended with Abbott (ABT - Free Report) standing at $130.28, reflecting a -1.79% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.49% gain on the day. Elsewhere, the Dow lost 0.2%, while the tech-heavy Nasdaq added 1.22%.

The maker of infant formula, medical devices and drugs's stock has climbed by 0.93% in the past month, exceeding the Medical sector's loss of 1.05% and the S&P 500's loss of 8.15%.

Analysts and investors alike will be keeping a close eye on the performance of Abbott in its upcoming earnings disclosure. In that report, analysts expect Abbott to post earnings of $1.07 per share. This would mark year-over-year growth of 9.18%. Simultaneously, our latest consensus estimate expects the revenue to be $10.39 billion, showing a 4.28% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.15 per share and revenue of $44.35 billion, indicating changes of +10.28% and +5.73%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Abbott should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, Abbott possesses a Zacks Rank of #3 (Hold).

In the context of valuation, Abbott is at present trading with a Forward P/E ratio of 25.78. Its industry sports an average Forward P/E of 18.22, so one might conclude that Abbott is trading at a premium comparatively.

It is also worth noting that ABT currently has a PEG ratio of 2.47. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Medical - Products industry was having an average PEG ratio of 2.02.

The Medical - Products industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 130, finds itself in the bottom 49% echelons 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.

To follow ABT in the coming trading sessions, be sure to utilize Zacks.com.


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