What To Expect From Abbott’s Q1?

ABT: Abbott Laboratories logo
Abbott Laboratories

Abbott (NYSE: ABT) will report its Q1 2023 results on Wednesday, April 19. We expect the company to post revenue and earnings in line with the street expectations. Abbott will see a decline in sales given the forex headwinds and lower Covid-19-related testing demand. Although we expect Abbott to post an in-line Q1, our forecast indicates that ABT stock has some room for growth, as discussed below. Our interactive dashboard analysis of Abbott Earnings Preview has additional details.

(1) Revenues are expected to be lower compared to the prior-year quarter

  • Trefis estimates Abbott’s Q1 2023 revenues to be around $9.6 billion, reflecting a 19% y-o-y decline and aligning with the consensus estimate.
  • The revenue decline can primarily be attributed to lower demand for Covid-19 testing and forex headwinds.
  • For perspective, Abbott expects total Covid-19-related sales of $2.0 billion in 2023, compared to $8.4 billion last year.
  • Looking at Q4, the company reported total revenue of $10.1 billion, down 12% y-o-y, primarily due to a 26% decline in diagnostics sales.
  • Our dashboard on Abbott Revenues offers more details on the company’s segments.
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(2) EPS likely to be in line with the consensus estimates

  • Abbott’s Q1 2023 adjusted earnings per share (EPS) is expected to be $0.99 per Trefis analysis, aligning with the consensus estimate.
  • Abbott’s adjusted net income of $1.8 billion in Q4 2022 reflected a 23% fall from its $2.4 billion figure in the prior-year quarter. This can be attributed to lower revenues and about 780 bps operating margin contraction due to higher costs. Our Abbott Operating Income Comparison dashboard has more details.
  • For the full-year 2023, we expect the adjusted EPS to be lower at $4.44, compared to $5.34 in 2022.

(3) ABT stock looks like it has more room for growth

  • We estimate Abbott’s Valuation to be around $119 per share, about 15% above the current market price of $103.
  • At its current levels, ABT stock is trading at a forward P/E multiple of 23x based on our EPS estimate of $4.44 for 2023, compared to the last three-year average of 24x.
  • If the company reports upbeat Q1 results and provides a 2023 outlook better than the street estimates, the P/E multiple will likely be revised upward, resulting in higher levels for ABT stock.

While ABT stock looks like it has more room for growth, it is helpful to see how Abbott’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Cintas vs. Merck.

With inflation rising and the Fed raising interest rates, among other factors, ABT stock has fallen 6% this year. Can it drop more? See how low Abbott stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Apr 2023
MTD [1]
YTD [1]
Total [2]
 ABT Return 2% -6% 169%
 S&P 500 Return 0% 7% 84%
 Trefis Multi-Strategy Portfolio 1% 9% 242%

[1] Month-to-date and year-to-date as of 4/12/2023
[2] Cumulative total returns since the end of 2016

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