Abbott Laboratories Stock: Join the Rally at a 19% Discount

Abbott Laboratories (ABT) stock might be a good buy now. Why? Because you get high margins – reflective of pricing power and cash generation capacity – for a discounted price. Companies like this generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. The market tends to reward that.

What Is Happening With ABT

ABT stock is now 19% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago.

The stock may not reflect it yet, but here is what’s going well for the company. While Q4 2025 revenue fell short of forecasts, Abbott’s Medical Devices segment demonstrated strength, with continuous glucose monitors driving customer demand. New product approvals, such as the Volt™ PFA System, further enhance its high-value electrophysiology portfolio. The Established Pharmaceuticals segment also achieved solid growth in key emerging markets. Although the Nutrition segment experienced volume declines, new product launches are planned for 2026 to reaccelerate this business. Furthermore, a pending acquisition of Exact Sciences aims to deepen Abbott’s presence in the fast-growing cancer diagnostics market. Abbott projects 6.5-7.5% organic sales growth for 2026.

ABT Has Strong Fundamentals

• Recent Profitability: Nearly 20.8% operating cash flow margin and 17.6% operating margin LTM.
• Long-Term Profitability: About 19.5% operating cash flow margin and 16.3% operating margin last 3-year average.
• Revenue Growth: Abbott Laboratories saw growth of 6.4% LTM and -0.6% last 3-year average, but this is not a growth story
• Available At Discount: At P/S multiple of 4.3, ABT stock is available at a 19% discount vs 1 year ago.

Below is a quick comparison of ABT fundamentals with S&P medians.

*LTM: Last Twelve Months

Don’t Expect A Slam Dunk, Though

While ABT stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. ABT fell about 44% in the Dot-Com crash, nearly 29% during the Global Financial Crisis, and around 34% in the Inflation Shock. The Covid selloff wasn’t light either, with a drop just over 31%. Even the 2018 Correction knocked it down by more than 11%. It shows that no matter how solid a stock seems, major market shocks can still take a big slice out of your investment.

If you want more details, read Buy or Sell ABT Stock.

How We Arrived At ABT Stock

ABT piqued our interest because it meets the following criteria:

1. Greater than $10 Bil in market cap
2. High CFO (cash flow from operations) margins or operating margins
3. Meaningfully declined in valuation over the past 1 year

But if ABT doesn’t look good enough to you, here are other stocks that also check all these boxes:

1. Visa (V)
2. Salesforce (CRM)
3. T-Mobile US (TMUS)

Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfill the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 19%
• 12-month win rate (percentage of picks returning positive) of about 72%

Move Beyond Single Stocks With A Multi Asset Portfolio

Individual stocks can soar or tank but multi asset exposure steadies the ride. A spread out portfolio captures upside while limiting the damage from any one market.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices