Over the last year, Abbott Laboratories logged a -4.0% change, with its stock price reaching a high of $115.69 and a low of $93.25. Over the same period, the stock underperformed the S&P 500 index by -19.0%. As of April 2023, the company's 50-day average price was $106.43. Abbott Laboratories, together with its subsidiaries, discovers, develops, manufactures, and sells health care products worldwide. Based in North Chicago, IL, the large-cap Health Care company has 115,000 full time employees. Abbott Laboratories has offered a 1.9% dividend yield over the last 12 months.
Growing Revenues With a Flat Capital Expenditure Trend:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $31,904 | $34,608 | $43,075 | $43,653 |
| Gross Margins | 58.5% | 56.6% | 57.0% | 56.2% |
| Operating Margins | 14.2% | 15.5% | 19.6% | 19.2% |
| Net Margins | 11.56% | 12.99% | 16.42% | 15.88% |
| Net Income (MM) | $3,687 | $4,495 | $7,071 | $6,933 |
| Net Interest Expense (MM) | -576 | -500 | -490 | -375 |
| Net Interest Expense (MM) | -$576 | -$500 | -$490 | -$375 |
| Depreciation & Amort. (MM) | -$1,936 | -$2,132 | -$2,047 | -$2,013 |
| Earnings Per Share | $2.06 | $2.5 | $3.94 | $3.27 |
| EPS Growth | n/a | 21.36% | 57.6% | -17.01% |
| Diluted Shares (MM) | 1,781 | 1,786 | 1,789 | 1,739 |
| Free Cash Flow (MM) | $4,498 | $5,724 | $8,648 | $7,804 |
| Capital Expenditures (MM) | -$1,638 | -$2,177 | -$1,885 | -$1,777 |
| Net Current Assets (MM) | -$20,919 | -$19,104 | -$14,933 | -$12,309 |
| Current Ratio | 1.44 | 1.72 | 1.85 | 1.63 |
| Long Term Debt (MM) | $16,661 | $18,527 | $17,296 | $14,522 |
| Net Debt / EBITDA | 2.17 | 1.56 | 0.77 | 0.64 |
Abbott Laboratories benefits from growing revenues and a flat capital expenditure trend, strong margins with a positive growth rate, and low leverage. The company's financial statements show a strong EPS growth trend and consistent free cash flow. However, the firm has slimmer gross margins than its peers. Finally, we note that Abbott Laboratories has a decent current ratio.
Abbott Laboratories's Valuation Is in Line With Its Sector Averages:
Abbott Laboratories has a trailing twelve month P/E ratio of 32.5, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of $4.28, the company has a forward P/E ratio of 24.9. Abbott Laboratories's PEG ratio is 3.35 on the basis of the 9.7% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, Abbott Laboratories is likely overvalued compared to the book value of its equity, since its P/B ratio of 4.78 is higher than the sector average of 4.16. The company's shares are currently trading 171.0% above their Graham number. In conclusion, Abbott Laboratories's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Analysts Give Abbott Laboratories an Average Rating of Buy:
The 21 analysts following Abbott Laboratories have set target prices ranging from $95.52 to $133.55 per share, for an average of $114.91 with a buy rating. As of April 2023, the company is trading -7.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Abbott Laboratories has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 76.1% of the company's shares, and the insider ownership rate stands at 0.55%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 9% stake in the company is worth $15,825,598,557.
