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Abbott Laboratories (ABT)
NYSE:ABT
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Abbott Laboratories
(NYSE:ABT)79Outperform
Positive Factors
Earnings
Medical Devices was a standout performer, delivering 14.0% organic growth and sales of $5.05B vs the Street's $4.97B expectation.
Growth Expectations
ABT projects organic sales growth of 7.5-8.5% for 2025, which is higher than the Street's forecast of ~7%, reflecting strong future growth expectations.
Negative Factors
Revenue Miss
Revenue miss attributed to greater FX headwinds and lower-than-expected COVID testing revenue.
Abbott Laboratories (ABT) vs. S&P 500 (SPY)
Market Cap
$238.61B
Dividend Yield1.6%
Average Volume (3M)7.19M
Price to Earnings (P/E)18.0
Beta (1Y)0.43
Revenue Growth4.59%
EPS Growth134.50%
CountryUS
Employees114,000
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)7.66
Shares Outstanding1,734,323,400
10 Day Avg. Volume6,327,258
30 Day Avg. Volume7,190,220
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)N/A
Price to Sales (P/S)5.80
Price to Cash Flow (P/CF)21.20
P/FCF Ratio21.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$139.88Price Target Upside1.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
Abbott Laboratories Business Overview & Revenue Model
Company DescriptionAbbott Laboratories offers a diversified line of healthcare products. It operates through four reportable segments: Established Pharmaceutical Products International (includes international sales of branded generic pharmaceutical products), Nutritional Products Diagnostic Products and Medical Devices. The company was founded by Wallace Calvin Abbott in 1888 and is headquartered in Abbott Park, IL.
How the Company Makes MoneyAbbott Laboratories generates revenue through the sale of its diverse product portfolio across its four main business segments. The Established Pharmaceutical Products segment focuses on branded generic pharmaceuticals, primarily in emerging markets, contributing significantly to the company's revenue. The Diagnostic Products segment offers a range of testing systems and assays, including core laboratory, molecular, and point-of-care testing solutions, generating revenue through both product sales and service contracts. Abbott's Nutritional Products segment includes pediatric and adult nutrition brands like Similac and Ensure, which are distributed globally, providing a steady revenue stream. The Medical Devices segment encompasses a wide array of products for cardiovascular, diabetes care, neuromodulation, and other medical device markets, generating revenue from both the sale of devices and associated consumables. Additionally, strategic partnerships, research and development initiatives, and a focus on innovation help to drive Abbott's growth and profitability in the competitive healthcare industry.
Abbott Laboratories Financial Statement Overview
Summary
Abbott Laboratories shows strong revenue growth and stable financials with solid profit margins. Despite fluctuations in operational efficiency and increased leverage, cash flow generation remains robust, supporting liquidity and flexibility.Income Statement
Abbott Laboratories has demonstrated strong revenue growth over the years with a notable increase from $31.9 billion in 2019 to $41.9 billion in 2024. The gross profit margin has remained robust, reflecting efficient cost management. However, EBIT and EBITDA margins have seen some fluctuations, indicating variability in operational efficiency. The net profit margin shows a substantial improvement, particularly in 2024, driven by increased net income.85
Very Positive
Balance Sheet
The company maintains a stable equity position with stockholders' equity rising consistently. The debt-to-equity ratio shows moderate leverage, although total debt has increased over the years, which could pose a risk if not managed properly. The equity ratio indicates a healthy level of assets financed by equity, providing a cushion against liabilities.70
Positive
Cash Flow
Operating cash flow has shown positive growth, supporting strong free cash flow generation. The free cash flow growth rate is commendable, although there are occasional fluctuations. The operating cash flow to net income ratio suggests effective conversion of profits into cash flow, enhancing financial flexibility. However, the free cash flow to net income ratio indicates room for improvement in cash flow efficiency.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 41.22B | 41.95B | 40.11B | 43.65B | 43.08B | 34.61B | Gross Profit |
| 22.55B | 41.95B | 22.13B | 24.51B | 24.54B | 19.61B | EBIT |
| 6.90B | 6.83B | 6.48B | 8.36B | 8.43B | 5.36B | EBITDA |
| 10.76B | 6.83B | 10.61B | 12.38B | 12.74B | 8.79B | Net Income Common Stockholders |
| 5.77B | 13.40B | 5.72B | 6.93B | 7.07B | 4.50B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 0.00 | 7.28B | 10.17B | 10.25B | 7.15B | Total Assets |
| 0.00 | 0.00 | 73.21B | 74.44B | 75.20B | 72.55B | Total Debt |
| 20.86B | 20.86B | 15.87B | 17.72B | 19.01B | 19.65B | Net Debt |
| 20.86B | 20.86B | 8.98B | 7.83B | 9.21B | 12.81B | Total Liabilities |
| 237.00M | 237.00M | 34.39B | 37.53B | 39.17B | 39.55B | Stockholders Equity |
| 17.25B | 17.25B | 38.60B | 36.69B | 35.80B | 32.78B |
| Cash Flow | Free Cash Flow | ||||
| 6.49B | 8.56B | 5.06B | 7.80B | 8.65B | 5.72B | Operating Cash Flow |
| 8.73B | 8.56B | 7.26B | 9.58B | 10.53B | 7.90B | Investing Cash Flow |
| -2.30B | -2.34B | -3.13B | -1.74B | -2.01B | -2.21B | Financing Cash Flow |
| -5.59B | -5.40B | -7.09B | -7.64B | -5.49B | -2.78B |
Abbott Laboratories Technical Analysis
Positive
137.58
Price Trends
123.49
Positive
119.48
Positive
113.17
Positive
Market Momentum
3.99
Negative
68.14
Neutral
84.59
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABT, the sentiment is Positive. The current price of 137.58 is above the 20-day moving average (MA) of 133.15, above the 50-day MA of 123.49, and above the 200-day MA of 113.17, indicating a bullish trend. The MACD of 3.99 indicates Negative momentum. The RSI at 68.14 is Neutral, neither overbought nor oversold. The STOCH value of 84.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ABT.
Abbott Laboratories Risk Analysis
Abbott Laboratories disclosed 20 risk factors in its most recent earnings report. Abbott Laboratories reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Abbott Laboratories Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $148.79B | 50.24 | 14.51% | 0.82% | 10.23% | -5.74% | |
79 Outperform | $238.61B | 18.01 | 28.12% | 1.60% | 4.59% | 134.50% | |
78 Outperform | $398.27B | 28.57 | 19.68% | 2.96% | -4.51% | 3.69% | |
77 Outperform | $119.32B | 28.28 | 8.63% | 2.96% | 2.72% | 4.48% | |
73 Outperform | $65.60B | 37.95 | 6.85% | 1.70% | 5.89% | 42.05% | |
54 Neutral | $17.80B | 136.07 | -4.48% | 2.64% | -14.00% | -184.82% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
ABT
Abbott Laboratories
137.58
20.62
17.63%
BAX
Baxter International
34.79
-7.08
-16.91%
BDX
Becton Dickinson
224.27
-7.40
-3.19%
JNJ
Johnson & Johnson
165.42
11.03
7.14%
MDT
Medtronic
93.03
10.31
12.46%
SYK
Stryker
389.92
38.16
10.85%
Abbott Laboratories Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: 17.80% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth across several segments, particularly in medical devices and adult nutrition, alongside effective financial management and strategic guidance for 2025. However, challenges such as foreign exchange impacts, market dynamics in China, and an increased tax rate were noted.Highlights
Strong Sales Growth
Achieved sales growth of 9.5% excluding COVID testing, with significant contributions from adult nutrition and medical devices. Fourth quarter sales grew 10%, excluding COVID testing sales.
Record Operating Cash Flow
Generated $8.5 billion of operating cash flow, which supported reinvestment in the business, debt repayment, and $5 billion returned to shareholders.
Medical Devices Performance
Medical Devices sales grew 14%, with notable growth in Diabetes Care (23%), Structural Heart (23%), and Electrophysiology (9%).
2025 Guidance
Forecasted organic sales growth of 7.5% to 8.5% for 2025, with adjusted earnings per share expected to be in the range of $5.05 to $5.25, indicating double-digit growth at the midpoint.
Lowlights
Impact of Foreign Exchange
The U.S. dollar's strength had an unfavorable impact of 1.4% on fourth quarter sales, affecting overall sales comparisons.
Challenges in China Diagnostics
Core Laboratory Diagnostics growth was impacted by challenging market dynamics in China, with double-digit growth in other markets.
Increased Tax Rate
The adjusted tax rate for 2025 is expected to increase to 16% to 17% due to the adoption of the Pillar 2 tax framework.
Company Guidance
During Abbott's Fourth Quarter 2024 Earnings Conference Call, the guidance for 2025 included expectations for robust growth across various metrics. Abbott forecasted organic sales growth to range between 7.5% and 8.5%, aiming for adjusted earnings per share (EPS) between $5.05 and $5.25, reflecting double-digit growth at the midpoint. The company outlined significant achievements in 2024, such as a 9.5% sales growth excluding COVID testing, a 70 basis point improvement in gross margins, and generating $8.5 billion in operating cash flow. For 2025, Abbott anticipates further expansion in its gross margin profile to around 57% of sales and an improvement in its adjusted operating margin profile by 150 basis points, driven by a combination of gross margin expansion and operating margin leverage. The adjusted tax rate is expected to increase to a range of 16% to 17% due to the adoption of the Pillar 2 tax framework. Abbott also highlighted strong performance across its business segments, including Nutrition, Diagnostics, and Medical Devices, and emphasized its commitment to innovation and operational excellence to sustain growth momentum.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.