Abbott Laboratories

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ABT : NYSE : Health Care
$42.19 | %
Today's Range: 42.05 - 42.42
Avg. Daily Volume: 9,827,300
09/23/16 - 4:00 PM ET

Financial Analysis


ABBOTT LABORATORIES's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. ABBOTT LABORATORIES has weak liquidity. Currently, the Quick Ratio is 0.92 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 10.13% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)5333.05170.0
EBITDA ($mil)1243.01191.0
EBIT ($mil)896.0851.0
Net Income ($mil)615.0784.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)4438.011177.0
Total Assets ($mil)39831.044125.0
Total Debt ($mil)8912.08761.0
Equity ($mil)20675.023008.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin61.3761.41
EBITDA Margin23.323.03
Operating Margin16.816.46
Sales Turnover0.520.46
Return on Assets5.7110.24
Return on Equity9.4110.37
Debt Q2 FY16 Q2 FY15
Current Ratio1.52.3
Debt/Capital0.30.28
Interest Expense46.044.0
Interest Coverage19.4819.34


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1470.01490.44
Div / share0.260.24
EPS0.40.52
Book value / share14.0615.44
Institutional Own % n/a n/a
Avg Daily Volume9993165.09787653.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 43.80 for the Health Care Equipment & Supplies industry and a premium compared to the S&P 500 average of 25.03. To use another comparison, its price-to-book ratio of 2.98 indicates valuation on par with the S&P 500 average of 2.80 and a significant discount versus the industry average of 5.00. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, ABBOTT LABORATORIES proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ABT 32.50 Peers 43.80   ABT 21.65 Peers 28.61

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ABT is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ABT is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ABT 17.11 Peers 24.84   ABT 1.18 Peers 0.83

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ABT is trading at a discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ABT trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ABT 2.98 Peers 5.00   ABT -17.84 Peers 23.13

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ABT is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, ABT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ABT 3.00 Peers 14.66   ABT 0.26 Peers 18.31

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ABT is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ABT significantly trails its peers on the basis of sales growth

 

 

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