Assessing Abbott Laboratories (ABT) Valuation Following Steady 2024 Gains and Analyst Growth Projections

Abbott Laboratories (ABT) shares have shown modest movement lately, with a daily uptick of nearly 1% and a year-to-date climb of 13%. Investors appear to be taking a wait-and-see approach, weighing recent financial trends against broader sector shifts.

See our latest analysis for Abbott Laboratories.

Through 2024, Abbott Laboratories has gradually built momentum, as reflected in its 12.88% year-to-date share price return and a 10.61% total shareholder return over the past year. While daily or weekly fluctuations have cropped up, the stock’s longer-term trend remains positive, suggesting that investor confidence is steady even as the company navigates sector headwinds.

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But amid steady gains and upbeat analyst targets, the real question is whether the recent rise still leaves Abbott Laboratories undervalued or if the market is already anticipating future growth. Is there room for upside, or has optimism been fully priced in?

Most Popular Narrative: 11.4% Undervalued

Abbott Laboratories’ widely followed narrative implies its fair value is $144.47, around $16 above the current share price. The stage is set by bold calls on future growth and profitability. What underpins this confidence?

The expansion of healthcare access and rising middle class in key emerging markets (such as India, China, Latin America, and the Middle East) is fueling robust growth in branded generics and biosimilars, highlighted by Abbott's record sales in these regions and imminent biosimilar launches. This trend is poised to drive sustained double-digit top-line growth and greater geographic revenue diversification.

Read the complete narrative.

Curious how projections of record expansion and aggressive market share gains translate into a double-digit premium for Abbott Labs? The narrative is driven by controversial assumptions, with future profits and margins that rival tech leaders dominating the model. Wondering if this optimistic scenario is justified or off the mark? Click through to find out what’s fueling this eye-catching fair value assessment.

Result: Fair Value of $144.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent headwinds in diagnostics or intensifying global competition could quickly erode profit margins and challenge the current growth narrative for Abbott Laboratories.

Find out about the key risks to this Abbott Laboratories narrative.

Another View: SWS DCF Model Sees Less Upside

While analyst multiples suggest Abbott Laboratories could be undervalued, our SWS DCF model tells a different story. According to this approach, the fair value is just $72.89 per share, which is well below the current market price. This means investors relying on long-term cash flows may see more risk than reward at current levels.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Abbott Laboratories for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 932 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Abbott Laboratories Narrative

If you have a different perspective or want to examine the story through your own lens, creating your own valuation and outlook takes just a few minutes. Start here: Do it your way

A great starting point for your Abbott Laboratories research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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