NYSE:ABT

Stock Analysis Report

Executive Summary

Abbott Laboratories discovers, develops, manufactures, and sells health care products worldwide.

Rewards

Trading at 26.3% below its fair value

Earnings are forecast to grow 20.34% per year

Earnings grew by 59% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid track record with reasonable growth potential.


Similar Companies

Share Price & News

How has Abbott Laboratories's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ABT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

ABT

2.2%

US Medical Equipment

1.5%

US Market


1 Year Return

19.2%

ABT

22.1%

US Medical Equipment

20.1%

US Market

Return vs Industry: ABT underperformed the US Medical Equipment industry which returned 22.1% over the past year.

Return vs Market: ABT matched the US Market which returned 20.1% over the past year.


Shareholder returns

ABTIndustryMarket
7 Day2.0%2.2%1.5%
30 Day0.7%1.0%1.4%
90 Day6.4%8.7%8.7%
1 Year21.1%19.2%23.0%22.1%22.7%20.1%
3 Year112.0%100.6%84.6%79.4%50.1%40.5%
5 Year109.2%88.8%117.1%94.4%73.1%54.1%

Price Volatility Vs. Market

How volatile is Abbott Laboratories's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Abbott Laboratories undervalued compared to its fair value and its price relative to the market?

26.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ABT ($89.66) is trading below our estimate of fair value ($121.58)

Significantly Below Fair Value: ABT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ABT is good value based on its PE Ratio (43.3x) compared to the Medical Equipment industry average (47.1x).

PE vs Market: ABT is poor value based on its PE Ratio (43.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: ABT is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: ABT is overvalued based on its PB Ratio (5x) compared to the US Medical Equipment industry average (4x).


Next Steps

Future Growth

How is Abbott Laboratories forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

20.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABT's forecast earnings growth (20.3% per year) is above the savings rate (1.7%).

Earnings vs Market: ABT's earnings (20.3% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ABT's revenue (6.5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: ABT's revenue (6.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ABT's Return on Equity is forecast to be high in 3 years time (20.2%)


Next Steps

Past Performance

How has Abbott Laboratories performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ABT has high quality earnings.

Growing Profit Margin: ABT's current net profit margins (11.6%) are higher than last year (7.6%).


Past Earnings Growth Analysis

Earnings Trend: ABT's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: ABT's earnings growth over the past year (59%) exceeds its 5-year average (5.7% per year).

Earnings vs Industry: ABT earnings growth over the past year (59%) exceeded the Medical Equipment industry 7.1%.


Return on Equity

High ROE: ABT's Return on Equity (11.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Abbott Laboratories's financial position?


Financial Position Analysis

Short Term Liabilities: ABT's short term assets ($16.1B) exceed its short term liabilities ($10.5B).

Long Term Liabilities: ABT's short term assets ($16.1B) do not cover its long term liabilities ($26.0B).


Debt to Equity History and Analysis

Debt Level: ABT's debt to equity ratio (59.6%) is considered high.

Reducing Debt: ABT's debt to equity ratio has increased from 36.2% to 59.6% over the past 5 years.

Debt Coverage: ABT's debt is well covered by operating cash flow (28.7%).

Interest Coverage: ABT's interest payments on its debt are well covered by EBIT (9x coverage).


Balance Sheet

Inventory Level: ABT has a low level of unsold assets or inventory.

Debt Coverage by Assets: ABT's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Abbott Laboratories's current dividend yield, its reliability and sustainability?

1.61%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.4%markettop25%3.7%industryaverage1.1%forecastin3Years1.7%

Current dividend yield vs market & industry

Notable Dividend: ABT's dividend (1.61%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: ABT's dividend (1.61%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: ABT's dividend payments have been volatile in the past 10 years.

Growing Dividend: ABT's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (63.8%), ABT's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ABT's dividends in 3 years are forecast to be well covered by earnings (38.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.2yrs

Average management tenure


CEO

Miles White (64yo)

21.1yrs

Tenure

US$24,254,238

Compensation

Mr. Miles D. White serves as the Chairman and Chief Executive Officer at Abbott Laboratories (Singapore) Pte. Ltd. He serves as the Chairman of Abbott Healthcare Pvt. Ltd. Mr. White has been the Chairman a ...


CEO Compensation Analysis

Compensation vs Market: Miles's total compensation ($USD24.25M) is above average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Miles's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Miles White
Chairman of the Board & CEO21.1yrsUS$24.25m0.18% $286.4m
Robert Ford
President0.3yrsUS$8.13m0.011% $17.7m
Brian Yoor
Executive VP of Finance & CFO4.7yrsUS$7.61m0.0066% $10.4m
Hubert Allen
Executive VP7.1yrsUS$7.32m0.0083% $13.1m
Scott Leinenweber
Vice President of Investor Relations0yrsno datano data
James Young
VP and Chief Ethics & Compliance Officer0yrsno datano data
Melissa Brotz
Head of Public Affairs & Divisional Vice President0yrsno datano data
Elaine Leavenworth
Senior VP and Chief Marketing & External Affairs Officer5.2yrsno datano data
Mary Moreland
Executive Vice President of Human Resources0.5yrsno data0.0038% $6.0m
Jaime Contreras
Senior Vice President of Core Laboratory Diagnostics - Commercial Operations6.4yrsno data0.013% $20.0m

5.2yrs

Average Tenure

53yo

Average Age

Experienced Management: ABT's management team is seasoned and experienced (5.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Miles White
Chairman of the Board & CEO21.1yrsUS$24.25m0.18% $286.4m
Robert Ford
President0.3yrsUS$8.13m0.011% $17.7m
Roxanne Austin
Independent Director20.1yrsUS$326.98k0.00039% $618.4k
Edward Liddy
Independent Director10.1yrsUS$325.98k0.00013% $206.1k
William Osborn
Lead Independent Director0yrsUS$330.98k0.0014% $2.2m
Glenn Tilton
Independent Director13.1yrsUS$331.98k0.00042% $666.0k
Samuel Scott
Independent Director13.1yrsUS$331.98k0.00034% $539.1k
Phebe Novakovic
Independent Director10.1yrsUS$315.98k0.000030% $47.6k
Robert Alpern
Independent Director11.3yrsUS$361.48kno data
Sally Blount
Independent Director8.2yrsUS$332.15k0.00015% $237.8k

11.3yrs

Average Tenure

66yo

Average Age

Experienced Board: ABT's board of directors are seasoned and experienced ( 11.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Abbott Laboratories's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Abbott Laboratories
  • Ticker: ABT
  • Exchange: NYSE
  • Founded: 1888
  • Industry: Health Care Equipment
  • Sector: Healthcare
  • Market Cap: US$158.560b
  • Shares outstanding: 1.77b
  • Website: https://www.abbott.com

Number of Employees


Location

  • Abbott Laboratories
  • 100 Abbott Park Road
  • Abbott Park
  • Illinois
  • 60064
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ABTNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1968
0Q15LSE (London Stock Exchange)YesCommon SharesGBUSDJan 1968
ABTSWX (SIX Swiss Exchange)YesCommon SharesCHCHFJan 1968
ABT *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJan 1968
ABLXTRA (XETRA Trading Platform)YesCommon SharesDEEURJan 1968
ABLDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1968
ABTSNSE (Santiago Stock Exchange)YesCommon SharesCLUSDJan 1968
ABTBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 1/2 ORD NPVARARSSep 2000
ABTT34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 0.25 COM NPVBRBRLAug 2012

Biography

Abbott Laboratories discovers, develops, manufactures, and sells health care products worldwide. The company’s Established Pharmaceutical Products segment offers branded generic pharmaceuticals for the treatment of pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptom; gynecological disorder; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière's disease and vestibular vertigo; pain, fever, and inflammation; migraine; and anti-infective clarithromycin, as well as provides influenza vaccines and products that regulate physiological rhythm of the colon. Its Diagnostic Products segment offers core laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics systems that automates the extraction, purification, and preparation of DNA and RNA from patient samples, as well as detects and measures infectious agents; cartridges for blood analysis; rapid diagnostics systems for infectious diseases; molecular point-of-care care testing for HIV, influenza A and B, RSV, and strep A; cardiometabolic test systems; drug and alcohol test systems, as well as remote patient monitoring and consumer self-test systems; and informatics and automation solutions for use in laboratories. The company’s Nutritional Products segment provides pediatric and adult nutritional products. Its Cardiovascular and Neuromodulation Products segment offers rhythm management, electrophysiology, heart failure, vascular, and structural heart devices for the treatment of cardiovascular diseases, as well as neuromodulation devices for the management of chronic pain and movement disorders. The company also provides glucose and blood glucose monitoring systems, including test strips, sensors, data management decision software, and accessories for people with diabetes. The company was founded in 1888 and is headquartered in Abbott Park, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:30
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.