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Abbott Laboratories’s Valuation before Its 2Q16 Results

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Valuation multiples

After the release of its 1Q16 earnings results on April 20, 2016, Abbott Laboratories (ABT) was trading at a forward PE (price-to-earnings) multiple in the range of 16.4x–19.3x. Forward PE is a measure of a company’s growth and is calculated by dividing its stock price by the 12-month earnings estimate.

On July 12, 2016, Abbott Laboratories was trading at a forward PE of 19x, lower than its peers Boston Scientific (BSX) and Medtronic (MDT) but higher than Johnson and Johnson (JNJ). The below graph compares the forward PE of Abbott Laboratories and its peers.

Investors interested in broad-based exposure to Abbott Laboratories can consider the iShares Core S&P 500 ETF (IVV). ABT accounts for ~0.34% of IVV’s total holdings.

Abbott Laboratories has a strong product portfolio, leading market position, balanced consumer mix and business profile, and leaner business model due to the company’s recent restructuring initiatives. Abbott Laboratories appears to be poised for growth.

To learn more about Abbott Laboratories’s fundamentals and growth strategies, you can read Here’s to Your Health: An Insider’s Tour of Abbott Laboratories.

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Abbott Laboratories’s share price movement

Abbott Laboratories’s (ABT) stock was trading at $42.50 on July 12, 2016. It has a 50-day moving average of $39.10 and a 200-day moving average of $40.00. On July 23, 2015, Abbott Laboratories was trading at a 52-week high of $51.70. The stock was trading at a 52-week low of $36.00 on January 28, 2016.

The company’s share price rose by ~1% after the release of its 1Q16 earnings on April 20, 2016. The rise in its stock price was triggered by higher-than-expected earnings, although its revenue missed by a marginal 0.1%.

Abbott Laboratories’s share price rose by ~1% after the release of its 1Q16 earnings on April 20, 2016. The rise in its stock price was triggered by better-than-expected quarterly results.

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