Abbott is set to report its Q2 2024 results, with revenue expected to reach $10.3 billion and earnings per share at $1.10. This is in line with street expectations, and the company is expected to see a low single-digit increase in sales driven by global procedure volume growth. Despite this, there is ample room for Abbott’s stock to grow from its current level of $103. Trends that may influence Abbott’s results include performance in various segments, macroeconomic conditions like high oil prices, and interest rates.
The performance of Abbott’s stock in recent years has been lackluster compared to the S&P 500, with returns of 29% in 2021, -22% in 2022, and 0% in 2023. However, the Trefis High Quality Portfolio, consisting of 30 stocks, has outperformed the S&P 500 each year over the same period, indicating the potential for better returns with less risk. Given the current uncertain macroeconomic environment, it remains to be seen if Abbott will underperform the S&P in the next 12 months or see a strong jump in its stock price, which analysts estimate has room for growth.
Abbott’s valuation is estimated to be around $123 per share, 20% above the current market price. The stock is currently trading at 22x forward expected earnings of $4.60 per share in 2024, slightly lower than its average P/E ratio of 24x over the last five years. In the previous quarter, Abbott saw growth in its medical device, nutrition, and established pharmaceutical segments, offset by a decline in Diagnostics revenues due to lower demand for COVID-19 testing. The company’s adjusted pre-tax income margin declined 120 bps y-o-y to 20.4% in Q1.
For the latest quarter, Abbott is expected to see growth across its segments, with the Nutrition segment benefiting from market share gains and medical devices experiencing higher sales from procedure volume increases. The company’s FreeStyle Libre product is likely to continue driving growth in diabetes sales. COVID-19 testing sales are expected to be lower in Q2’24, offsetting growth from core laboratory diagnostics. Abbott’s guidance for the future will likely impact the near-term movement of its stock, with the potential for continued growth.
As Abbott’s stock shows potential for growth, it is important to compare how the company’s peers are performing on key metrics. Analyzing peer comparisons can provide valuable insights into Abbott’s position within its industry and potential areas for improvement. Overall, Abbott’s upcoming earnings report will shed light on the company’s performance and future prospects, with investors closely watching for any developments that may impact the stock’s trajectory.
