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Here's Why Abbott (ABT) Fell More Than Broader Market

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In the latest market close, Abbott (ABT - Free Report) reached $113.70, with a -0.39% movement compared to the previous day. This move lagged the S&P 500's daily loss of 0.19%. Meanwhile, the Dow experienced a rise of 0.09%, and the technology-dominated Nasdaq saw a decrease of 0.36%.

Coming into today, shares of the maker of infant formula, medical devices and drugs had gained 1.83% in the past month. In that same time, the Medical sector gained 1.44%, while the S&P 500 gained 2.06%.

The investment community will be closely monitoring the performance of Abbott in its forthcoming earnings report. The company's upcoming EPS is projected at $1.20, signifying a 5.26% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $10.52 billion, reflecting a 3.75% rise from the equivalent quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.66 per share and a revenue of $41.73 billion, representing changes of +4.95% and +4.05%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Abbott. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Abbott currently has a Zacks Rank of #4 (Sell).

With respect to valuation, Abbott is currently being traded at a Forward P/E ratio of 24.48. This indicates a premium in contrast to its industry's Forward P/E of 24.2.

We can also see that ABT currently has a PEG ratio of 2.84. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Medical - Products industry was having an average PEG ratio of 2.09.

The Medical - Products industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 68, finds itself in the top 27% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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