Buy or Sell Abbott Laboratories Stock?

Abbott Laboratories (ABT) stock has fallen 10% during the past day, and is currently trading at $108.61. We believe there are only a couple of things to fear in ABT stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $189 Bil in market cap, Abbott Laboratories provides healthcare products across pharmaceuticals, diagnostics, nutrition, and medical devices, specializing in cardiovascular treatments including rhythm management, electrophysiology, heart failure, vascular, and structural heart devices.

[1] Valuation Looks Moderate

This table highlights how ABT is valued vs broader market. For more details see: ABT Valuation Ratios

[2] Growth Is Inconsistent

• Abbott Laboratories has seen its top line shrink at an average rate of -0.6% over the last 3 years
• Its revenues have grown 6.4% from $41 Bil to $44 Bil in the last 12 months
• Also, its quarterly revenues grew 6.9% to $11 Bil in the most recent quarter from $11 Bil a year ago.

This table highlights how ABT is growing vs broader market. For more details see: ABT Revenue Comparison

[3] Profitability Appears Strong

• ABT last 12 month operating income was $7.7 Bil representing operating margin of 17.6%
• With cash flow margin of 20.8%, it generated nearly $9.1 Bil in operating cash flow over this period
• For the same period, ABT generated nearly $14 Bil in net income, suggesting net margin of about 31.9%

This table highlights how ABT profitability vs broader market. For more details see: ABT Operating Income Comparison

[4] Financial Stability Looks Strong

• ABT Debt was $13 Bil at the end of the most recent quarter, while its current Market Cap is $189 Bil. This implies Debt-to-Equity Ratio of 6.8%
• ABT Cash (including cash equivalents) makes up $7.7 Bil of $84 Bil in total Assets. This yields a Cash-to-Assets Ratio of 9.2%

[5] Downturn Resilience Is Strong

ABT has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• 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 $108.61

 
2020 Covid Pandemic

• 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.
• However, the stock fully recovered to its pre-Crisis peak by 16 April 2020

 
2008 Global Financial Crisis

• 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.
• However, the stock fully recovered to its pre-Crisis peak by 19 March 2012

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