Abbott Laboratories (ABT) stock analysis

P/E above its 5-year median

Abbott Laboratories's P/E of 40.5 is above its own 5-year median of 29.5.

P/E above the industry

Abbott Laboratories's P/E of 40.5 is above the Drugs median of 25.1.

EV/EBITDA above its 5-year median

Abbott Laboratories's EV/EBITDA of 32.6 is above its 5-year median of 29.2.

P/B above the industry

Abbott Laboratories's price-to-book of 3.71 is above the Drugs median of 2.29.

Trading above fair value

The share price of $109.29 is above our fair value estimate of $73.23.

Margin of safety under 20%

The price is 49.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 0.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -1.6% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -66.4% over the last twelve months, against a 5-year average of 7.7% a year.

Growing faster than the industry

Revenue grew 10.0% over the last twelve months; the Drugs median is 8.0%.

Guidance raised

Abbott Laboratories raised its full-year 2026 adjusted diluted earnings per share outlook on Jul 16, 2026.

Gross margin improving

Gross margin was 56.9% over the last twelve months, against 55.9% a year earlier.

Return on equity under 15%

Return on equity was 9.2% over the last twelve months and averaged 19.8% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 7.1%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Abbott Laboratories's return on equity of 9.2% is above the Drugs median of -58.9%.

Earnings grew over 5 years

Net income grew 7.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 9.7% over the last twelve months, against a 5-year average of 18.6%.

Net margin above the industry

Abbott Laboratories's net margin of 9.7% is above the Drugs median of -53.0%.

High debt

Debt is 61.1% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 57.2% five years ago to 61.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 28.4% of total debt.

Interest well covered

Operating income covers interest expense 6.7 times.

Short-term assets cover short-term debts

Current assets are 1.45 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.38; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Abbott Laboratories paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Abbott Laboratories yields 2.3%.

Dividend stability

Fewer than five years of dividend history.

Not covered by earnings

Dividends take 92.0% of net income, leaving little room.

Covered by free cash flow

Dividends take 64.0% of free cash flow.