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

In the latest close session, Abbott (ABT) was up +1.41% at $110.47. This move outpaced the S&P 500's daily gain of 0.46%. Elsewhere, the Dow gained 0.56%, while the tech-heavy Nasdaq added 0.45%.

The maker of infant formula, medical devices and drugs's shares have seen an increase of 3.29% over the last month, not keeping up with the Medical sector's gain of 4.16% and outstripping the S&P 500's gain of 2%.

The upcoming earnings release of Abbott will be of great interest to investors. In that report, analysts expect Abbott to post earnings of $1.43 per share. This would mark year-over-year growth of 10%. At the same time, our most recent consensus estimate is projecting a revenue of $12.91 billion, reflecting a 13.52% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.52 per share and revenue of $50.32 billion. These totals would mark changes of +7.18% and +13.51%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Abbott. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.03% higher. 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 19.73. This signifies a discount in comparison to the average Forward P/E of 21.18 for its industry.

One should further note that ABT currently holds a PEG ratio of 2.02. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Medical - Products industry was having an average PEG ratio of 1.88.

The Medical - Products industry is part of the Medical sector. This group has a Zacks Industry Rank of 97, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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