Is It Time To Buy Abbott Stock Now?

Abbott Laboratories (NYSE:ABT) has significantly outperformed the broader S&P 500 index this year, with its stock price rising 18% compared to the S&P 500’s 6% gain. This strong performance stems from the company’s robust quarterly results and optimistic future projections. Given this recent surge, a natural question arises: Is ABT stock still a worthwhile investment? We believe it is. Our conclusion is based on a comprehensive analysis comparing ABT’s current valuation to its operational performance in recent years, as well as its present and historical financial health. As detailed below, our evaluation of Abbott Laboratories across key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—demonstrates the company’s strong operating performance and sound financial condition. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately, see – MSFT Stock To $1,000?

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How Does Abbott Laboratories’ Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, ABT stock looks slightly expensive compared to the broader market.

• Abbott Laboratories has a price-to-sales (P/S) ratio of 5.6 vs. a figure of 3.1 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 37.3 compared to 20.9 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 17.7 vs. the benchmark’s 26.9

How Have Abbott Laboratories’ Revenues Grown Over Recent Years?

Abbott Laboratories’ Revenues have grown marginally over recent years.

• Abbott Laboratories has seen its top line decline at an average rate of 0.7% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 4.6% from $40 Bil to $42 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 7.2% to $11 Bil in the most recent quarter from $10 Bil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is Abbott Laboratories?

Abbott Laboratories’ profit margins are higher than most companies in the Trefis coverage universe.

• Abbott Laboratories’ Operating Income over the last four quarters was $6.8 Bil, which represents a moderate Operating Margin of 16.3%
• Abbott Laboratories’ Operating Cash Flow (OCF) over this period was $8.6 Bil, pointing to a moderate OCF Margin of 20.4% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Abbott Laboratories’ Net Income was $13 Bil – indicating a considerably high Net Income Margin of 31.9% (vs. 11.6% for S&P 500)

Does Abbott Laboratories Look Financially Stable?

Abbott Laboratories’ balance sheet looks strong.

• Abbott Laboratories’ Debt figure was $15 Bil at the end of the most recent quarter, while its market capitalization is $233 Bil (as of 7/7/2025). This implies a strong Debt-to-Equity Ratio of 6.3% (vs. 19.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $8.0 Bil of the $81 Bil in Total Assets for Abbott Laboratories.  This yields a moderate Cash-to-Assets Ratio of 9.8%

How Resilient Is ABT Stock During A Downturn?

ABT stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on ABT stock? Our dashboard How Low Can Abbott Laboratories Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

• ABT stock fell 36.2% from a high of $141.46 on 27 December 2021 to $90.19 on 12 October 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is 140.22 on 3 March 2025 and currently trades at around $135

COVID-19 Pandemic (2020)

• ABT stock fell 31.6% from a high of $91.86 on 22 January 2020 to $62.82 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 16 April 2020

Global Financial Crisis (2008)

• ABT stock fell 30.6% from a high of $27.92 on 16 September 2008 to $19.38 on 1 May 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 19 March 2012

Putting All The Pieces Together: What It Means For ABT Stock

In summary, Abbott Laboratories’ performance across the parameters detailed above are as follows:

• Growth: Neutral
• Profitability: Strong
• Financial Stability: Strong
• Downturn Resilience: Strong
• Overall: Strong

Abbott exhibits strong performance across key financial metrics. While its current valuation, when compared to the broader market, appears somewhat elevated, it remains consistent with the stock’s historical average of 5 times trailing revenues. Furthermore, in comparison to peers like Boston Scientific (trading at 9 times trailing revenues) and Stryker (at 6 times), Abbott’s valuation is competitive.

We believe a premium to Abbott’s historical valuation multiple is warranted. This is driven by the continued market share gains of its FreeStyle Libre platform and the positive impact of recent product launches, including Lingo, TriClip, and i-STAT.

However, it’s crucial to acknowledge potential risks. Investors may be hesitant to assign a higher multiple given the uncertain macroeconomic conditions, particularly with recent developments such as President Trump imposing 25% tariffs on certain trading partners, including Japan and South Korea, effective August 1, 2025. Additionally, the company’s revenue growth has been tempered recently due to declining demand for COVID-19 testing. Therefore, prospective investors should carefully consider these risks before making an investment decision in ABT stock. See, there always remains a meaningful risk when investing in a single, or just a handful, of stocks. Consider the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

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