Is Abbott Laboratories Still Attractively Priced After Recent Medical Device Momentum In 2025?

• If you are wondering whether Abbott Laboratories at around $126 a share is still a smart buy or if the easy money has already been made, you are not alone. This breakdown is designed to cut through the noise on what the stock might really be worth.
• Over the last week the stock has climbed about 3.4%, but that comes after a softer patch with a 2.6% dip over the past month, leaving it still up a solid 11.7% year to date and 15.3% over the last year.
• Recent moves have been driven by ongoing attention on Abbott's medical devices and diagnostics portfolio, particularly as investors weigh how its core businesses are positioned for long term healthcare trends. At the same time, the market has been reassessing large, diversified healthcare names as a potential balance between growth and defensiveness, which has pulled Abbott back into the spotlight.
• Right now Abbott carries a valuation score of 3/6, suggesting it screens as undervalued on half of our checks. In the sections that follow we will unpack what that means across different valuation methods, before finishing with a more holistic way to think about its true worth beyond the numbers alone.

Abbott Laboratories delivered 15.3% returns over the last year. See how this stacks up to the rest of the Medical Equipment industry.

Approach 1: Abbott Laboratories Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business is worth by projecting the cash it is expected to generate in the future and then discounting those cash flows back to today in dollar terms.

For Abbott Laboratories, the latest twelve month free cash flow is about $6.8 billion. Using a 2 Stage Free Cash Flow to Equity model, analyst forecasts and subsequent extrapolations see free cash flow fluctuating but remaining robust, with projections around $8.4 billion by 2029 and continuing in a similar range into the next decade as growth moderates.

When those future cash flows are discounted back to the present, the model arrives at an intrinsic value of roughly $73.38 per share. Compared with the current share price around $126, the DCF implies the stock is about 72.7% overvalued based on this cash flow view.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Abbott Laboratories may be overvalued by 72.7%. Discover 910 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Abbott Laboratories.

Approach 2: Abbott Laboratories Price vs Earnings

For a mature, consistently profitable business like Abbott, the price to earnings, or PE, ratio is a useful way to judge valuation because it directly links what investors pay to the profits the company generates today.

In general, companies with faster and more predictable earnings growth, stronger competitive positions, and lower risk profiles warrant higher PE ratios, while slower growth or higher uncertainty usually pulls a fair PE lower. Abbott currently trades on about 15.8x earnings, which is well below the broader Medical Equipment industry average of roughly 30.0x and also below the peer group average near 48.4x.

Simply Wall St’s Fair Ratio for Abbott is 25.6x. This is a proprietary estimate of what a reasonable PE should be once its earnings growth outlook, profit margins, industry, market cap and risk profile are all taken into account. This can be more informative than a simple peer or industry comparison, which can be skewed by outliers or companies at very different stages of growth. With Abbott trading at 15.8x versus a Fair Ratio of 25.6x, the stock screens as materially undervalued on this earnings based view.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1463 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Abbott Laboratories Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple, user friendly stories that tie your view of Abbott’s business to explicit forecasts for its future revenue, earnings and margins, then translate that into a Fair Value you can compare with today’s share price.

On Simply Wall St’s Community page, investors build Narratives by spelling out how they think trends like aging populations, emerging market demand and new devices will shape Abbott’s long term growth and profitability, and the platform converts that story into a dynamic valuation that updates automatically when fresh news or earnings arrive.

This means two investors can look at the same stock and reach different, but clearly explained, conclusions. For example, one Narrative might see Abbott’s legal wins, Exact Sciences deal and device momentum supporting a Fair Value around $159 per share, while a more cautious Narrative that stresses regulatory risks, competition and margin pressure might land closer to $122, helping each investor decide how the stock fits their specific outlook.

Do you think there's more to the story for Abbott Laboratories? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com