Abbott Laboratories: A Compelling Long-Term Investment in Healthcare Innovation and Value

Valuation Attractiveness: A Discounted Leader in Healthcare

Abbott Laboratories (ABT) presents a compelling valuation case for long-term investors. As of July 2025, the stock trades at a trailing twelve-month (TTM) price-to-earnings (P/E) ratio of 16.0, significantly below its 10-year historical average of 49.67, according to StockAnalysis. This stark discount suggests the market is pricing in conservative expectations, despite Abbott's robust financial performance. The company's net income of $13.93 billion over the past twelve months and an earnings per share (EPS) of $7.97, per FullRatio, underscore its profitability, with gross and profit margins of 56.32% and 32.43%, respectively, according to CompaniesMarketCap, reflecting operational excellence.

While the forward P/E ratio of 24.90, reported by FinanceCharts, indicates some optimism for future earnings, the PEG ratio of 2.57, per Mordor Intelligence, remains elevated, implying the market anticipates modest growth. However, this metric may not fully capture Abbott's potential, given its strong R&D pipeline and expanding market share in high-growth segments. With a market capitalization of $230.96 billion, according to a Monexa analysis, Abbott is neither a small-cap disruptor nor an overpriced giant-it is a blue-chip company trading at a discount to its intrinsic value.

Growth Potential: Innovation-Driven Expansion in Diabetes Care and Structural Heart Devices

Abbott's long-term value proposition is anchored in its ability to capitalize on two of the healthcare sector's fastest-growing areas: diabetes care and structural heart devices.

Diabetes Care: Dominating the $167.5 Billion Market by 2034

The global diabetes care devices market is projected to grow at a 12.2% CAGR from 2025 to 2034, reaching $167.5 billion by 2034, according to GM Insights. Abbott's FreeStyle Libre platform is a cornerstone of this growth. In Q2 2025, the Diabetes Care segment achieved 19.6% year-over-year sales growth, with CGM sales exceeding $1.9 billion (StockAnalysis). Innovations like the Libre 3 and Lingo-a prescription-free CGM-have expanded access by reducing regulatory barriers, while partnerships with insulin pump manufacturers like Tandem Diabetes Care and Medtronic are creating a seamless ecosystem for patients, as reported by NoahAI.

Moreover, Abbott's pipeline includes a dual glucose-ketone sensor, which could revolutionize diabetes management by preventing diabetic ketoacidosis (CompaniesMarketCap). Regulatory tailwinds, such as the American Diabetes Association's updated guidelines endorsing CGM for non-insulin users, further amplify the addressable market (Monexa analysis).

Structural Heart Devices: A $21.48 Billion Opportunity by 2030

The structural heart devices market is expected to grow at a 9.24% CAGR from 2025 to 2030, reaching $21.48 billion by 2030, according to Mordor Intelligence. Abbott's TriClip™ transcatheter edge-to-edge repair system and the Tendyne mitral valve position it as a leader in minimally invasive solutions for mitral regurgitation. These innovations align with industry trends favoring shorter recovery times and improved clinical outcomes (FinanceCharts).

In 2024, Abbott invested $2.82 billion in R&D (6.7% of revenue) (CompaniesMarketCap), ensuring its pipeline remains competitive against peers like Edwards Lifesciences and Medtronic. Strategic partnerships with AI-enabled imaging firms for pre-op planning (Mordor Intelligence) and advancements in biomaterials (FinanceCharts) further strengthen its edge.

Competitive Positioning: Diversification and Global Reach as Moats

Abbott's diversified business model-spanning Diagnostics, Medical Devices, Nutrition, and Branded Generic Pharmaceuticals-reduces sector-specific risks. Its global footprint across 160 countries, noted by Pitchgrade, allows it to hedge against regional economic volatility, while its $11.1 billion Q2 2025 sales (Monexa analysis) demonstrate consistent revenue generation.

Despite facing competition from industry giants like Johnson & Johnson and Roche (Latterly), Abbott's focus on emerging markets and digital health integration (e.g., i-STAT® TBI cartridge for traumatic brain injury assessment, per Abbott's newsroom) ensures differentiation. While its 2025 Q2 net income growth of 36.64% lags behind the 67.4% average of competitors (CSImarket), its 7.37% revenue growth (CompaniesMarketCap) and strong cash flow position it to reinvest in innovation.

Conclusion: A Blue-Chip Undervaluation with High-Growth Catalysts

Abbott Laboratories combines the stability of a mature healthcare company with the innovation of a growth stock. Its undervalued P/E ratio, coupled with a 7.5–8.5% organic sales growth target for 2025, as guided in Abbott's investor release, makes it an attractive long-term holding. The diabetes care and structural heart markets are poised for explosive growth, and Abbott's leadership in these areas-backed by a robust R&D pipeline and global expansion-positions it to outperform peers.

For investors seeking a balance of value and growth, Abbott offers a rare combination: a discounted entry point into a company with a durable competitive moat and multi-decade growth trajectories.