Abbott (ABT) Exceeds Market Returns: Some Facts to Consider

Abbott (ABT) ended the recent trading session at $109.95, demonstrating a +1.78% change from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 1.01%. Meanwhile, the Dow gained 0.83%, and the Nasdaq, a tech-heavy index, added 1.22%.

Heading into today, shares of the maker of infant formula, medical devices and drugs had lost 4.13% over the past month, outpacing the Medical sector's loss of 5.53% and lagging the S&P 500's loss of 2.86%.

Investors will be eagerly watching for the performance of Abbott in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.15, signifying a 5.50% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $11.03 billion, reflecting a 6.53% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.68 per share and a revenue of $47.74 billion, signifying shifts of +10.29% and +7.7%, respectively, from the last 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. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.01% downward. Right now, Abbott possesses a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Abbott has a Forward P/E ratio of 19.03 right now. Its industry sports an average Forward P/E of 18.89, so one might conclude that Abbott is trading at a premium comparatively.

We can also see that ABT currently has a PEG ratio of 1.72. 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. As the market closed yesterday, the Medical - Products industry was having an average PEG ratio of 1.56.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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