Story updated at 10 a.m. to reflect market activity.
Abbott fell 0.8% to $42.39 in morning trading.
The analyst firm lowered its EPS estimates for 2015 through 2018 by 7% to 10%. The firm now expects earnings of $2.66 a share in 2015, down from previous estimates of $2.87 a share for the year. The estimates reflect Abbott's divestiture of the developed market EPD business to Mylan (MYL) according to Jefferies analysts.
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Separately, TheStreet Ratings team rates ABBOTT LABORATORIES as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ABBOTT LABORATORIES (ABT) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we find that net income has been generally deteriorating over time."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- ABBOTT LABORATORIES reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ABBOTT LABORATORIES increased its bottom line by earning $1.50 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $1.50).
- The gross profit margin for ABBOTT LABORATORIES is rather high; currently it is at 51.95%. Regardless of ABT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.39% trails the industry average.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 2.1% when compared to the same quarter one year ago, dropping from $476.06 million to $466.00 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- You can view the full analysis from the report here: ABT Ratings Report