Abbot (NYSE: ABT ) is scheduled to release its Q4 2022 results Wednesday, January 25, The company is expected to report earnings and revenue slightly higher than the street expects. The company’s performance will be affected by supply chain disruptions, forex headwinds and a decrease in Covid-19-related sales. Our forecast shows that ABT stock is well-priced, with Abbott posting positive results in the fourth quarter. Additional information can be found in our interactive dashboard analysis of Abbot Earnings Preview.
(1) Expected revenue slightly higher than the consensus estimates
- Trefis projects Abbott’s Q4 2022 revenue to be $9.7 billion. This is a 16% decline y-o y and slightly more than the consensus estimate of $9.6 trillion.
- The decline in revenue can be attributed primarily to lower demand for Covid-19 testing, and forex headwinds.
- To put it in perspective, Abbott anticipates total Covid-19-related sales of $500,000,000 in Q4, as opposed to $2.3 billion in quarter prior.
- The company’s Q3 revenue was $10.4 billion, which is 4.7% less than the previous year due to lower sales of Medical Devices, Nutrition, and Diagnostics.
- The dashboard on Abbot Revenues provides more information about the company’s segments.
(2) EPS are likely to be higher than the consensus estimates
- The adjusted earnings per share (EPS), for Abbott’s quarter of 2022, are expected to be $0.99 per Trefis Analysis. This is comfortably higher than the consensus estimate of $0.91.
- Abbott’s adjusted net loss of $2.0 billion for Q3 2022 was 19% lower than its $2.5 billion quarter prior year. This is due to lower revenues, and almost 300 bps gross margin contractions due to higher costs.
- We expect that the adjusted EPS for the full year 2023 will be $4.60. This compares to $5.24 2021 and $5.30 2022. This is due to a predicted decline in Covid-19-related Sales.
(3) ABT stock seems fairly valued
- We believe Abbott’s Valuation to be approximately $118 per share. This is about 3% more than the current market price, $114.
- ABT stock trades at a forward PE multiple of 25x. This is based on our estimated EPS of $4.60 for 2023. This is a significant difference from the previous three-year average value of 24x.
- If the company reports positive Q4 results and gives a better outlook for 2023 than the street estimates, then the P/E multiple will likely to be revised upwards, leading to higher levels of ABT stock.
ABT stock is priced fairly, but it’s worth looking at how Abbott’s Peers do on the relevant metrics. You’ll find more valuable comparisons of companies from different industries at PEER Comparisons
Additionally, there are many pricing discontinuities that can provide trading opportunities. You’ll be amazed at the opposite of what you might expect when it comes to stock valuations for Cintas and Merck .
ABT stock fell 8% over the past twelve months due to rising inflation and Fed raising interest rates. It could fall further. See the lowest that Abbott stock can fall by comparing it to its decline during previous market crashes. Here is a performance summary of all stocks in previous market crashes.
Invest with Trufis Market-Beating Portfolios
View all Trefis Estimated Prices