Is it too late to make money on ABT stock this fall?

Healthcare giant Abbott Laboratories (ABT) has raised its projected 2022 adjusted EPS to $5.23 from $5.17. “Our performance and increased guidance in the current macroeconomic environment reflect the strength of our diversified business model and execution,” said ABT Chairman and Chief Executive Officer Robert B. Ford.

“We are particularly pleased with the improved U.S. medical device sales growth rate, supported by several recent product launches, and continued strong performance by established pharmaceutical companies,” he added.

In addition, ABT has paid dividends for 33 consecutive years. Its dividend payments have grown at a CAGR of 12.1% over the past five years and 13.7% over the past three years. Its current dividend yield is 1.91%, compared to its four-year average of 1.49%.

ABT is down 2.4% over the past month, closing at $98.29 on the last trading day. It is down 30.2% so far this year and 22.4% in the past year.However, Wall Street analysts expect the stock to reach $118.21 in the near term, indicating that Potential upside of 20.3%.

The following are factors that may affect ABT’s performance in the near term:

sound financial position

ABT’s net sales for the nine months ended September 30, 2022 were $33.56 billion, an increase of 6.2% year over year. Its adjusted net income was $7.66 billion, up 9.3% year over year, while adjusted EPS was $4.31, up 10.8% year over year. In addition, its operating income was $7.06 billion, up 16.7% year over year.

attractive valuation

ABT’s forward EV/EBIT of 15.84x is 2.5% lower than the industry average of 16.25x. Its forward price/sales of 3.99x is 5.8% lower than the industry average of 4.24x. Also, its forward price/cash flow of 13.83x is 13.4% lower than the industry average of 15.97x.

solid profit margin

ABT last 12 months gross profit The profit margin of 57.19% is 4.96 percentage points higher than the industry average of 54.49%. Its trailing 12-month EBITDA and net profit margin of 29.14% and 17.52% were higher than the industry averages of 3.29% and negative 2.85%, respectively.

In addition, its trailing 12-month ROCE, ROTC, and ROTA were 22.17%, 11.46%, and 10.63%, respectively, while the industry averages were negative 38.67%, 21.39%, and 29.59%, respectively.

POWR ratings reflect promising outlook

ABT has an overall rating of B, equivalent to our proprietary Buy POWR rating system. POWR ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock’s quality is rated B, in line with its higher-than-industry profit margins. Its stability is rated B, in line with its 24-month beta of 0.63.

in 142 stocks Medical – Equipment and Equipment Industry, ABT ranked 8th.

click here Additional POWR ratings (growth, value, momentum and sentiment) for ABT.

View All Popular Stocks in the Medical Device & Equipment Industry here.

bottom line

ABT had a solid performance in its last reporting quarter. Additionally, its EPS is expected to grow 11% annually over the next five years. Additionally, it beat EPS estimates in all four trailing quarters.

While the stock has been falling in price recently, ABT appears poised to deliver solid returns over time, given its strong profitability and growth potential. So this could be an ideal buy this fall.

How does Abbott Laboratories (ABT) compete with its peers?

While ABT has an overall POWR rating of B, consider checking out its industry peer FONAR Corporation (FONR), Electromed, Inc. (ELMD) and Utah Medical Products (UTMD), which has an overall rating of A (Strong Buy).

ABT shares traded at $97.84 per share on Tuesday afternoon, down $0.45 (-0.46%). Year-to-date, ABT is down -29.32%, while the benchmark S&P 500 is up -18.26% over the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through insightful commentary. more…

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