Abbott Laboratories (NYSE:ABT) is scheduled to report Q3 earnings results before markets open for trading on October 21, 2020.
The company is expected to report earnings of $0.90/share on revenue of $8.516 billion. The consensus earnings per share (EPS) of $0.90/share is based on a poll of 19 analysts and represents a growth in eps of 7.7% over the same quarter last year, when the company reported earnings of $0.84/share.
The revenue forecast of $8.516 billion based on a poll of 17 analysts implies a year-over-year (YoY) growth in revenue of 5.4%. Last year the company reported $8.076 billion in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $8,515.86 | $8,076.00 | 5.4% |
| EPS | $0.90 | $0.84 | 7.7% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and met expectations 3 quarters.
What are your expectations from Abbott Laboratories for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.42 | $0.57 | 36.9% | Beat |
| Q1, 2020 | $0.61 | $0.65 | 7.3% | Beat |
| Q4, 2019 | $0.95 | $0.95 | 0.4% | Beat |
| Q3, 2019 | $0.84 | $0.84 | −0.2% | Missed |
| Q2, 2019 | $0.80 | $0.82 | 2.2% | Beat |
| Q1, 2019 | $0.62 | $0.63 | 2.1% | Beat |
| Q4, 2018 | $0.81 | $0.81 | 0.2% | Beat |
| Q3, 2018 | $0.75 | $0.75 | 0.6% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 2.6%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| July 16, 2020 | $96.73 | $99.25 | 2.6% | Increase |
| April 16, 2020 | $90.94 | $96.01 | 5.6% | Increase |
| January 22, 2020 | $89.73 | $90.73 | 1.1% | Increase |
| October 16, 2019 | $81.98 | $82.38 | 0.5% | Increase |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.79, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.79 implies a 0.3% chance of earnings manipulation.
Fundamentals And Technical Analysis
Abbott Laboratories is currently trading at $110.33/share, up 0.6% for the day. The company is trading at approximately 96.9% of its 52-week high of $114.19/share. The company’s stock price is up 11.2% since the last earnings report and down −0.6% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 57.44 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
Source: Finbox
The current share price implies a price-to-earnings (P/E) multiple of 63.82 and a forward P/E multiple of 32.56.
Abbott Laboratories’s current share price also implies a price-to-book (P/B) multiple of 6.41. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $110.33 |
| P/E Ratio | 63.8x |
| P/E Ratio (Fwd) | 32.6x |
| PEG Ratio | 9.8 |
| Total Debt / Total Capital | 9.2% |
| Levered Free Cash Flow | $4.564 billion |
| EV / EBITDA | 27.8x |
Abbott Laboratories is a large-cap stock with a market capitalization of $194.2 billion and a total enterprise value of $209 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.
Abbott Laboratories discovers, develops, manufactures, and sells health care products worldwide. Its Established Pharmaceutical Products segment offers generic pharmaceuticals for the treatment of pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptom; gynecological disorder; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière’s disease and vestibular vertigo; pain, fever, and inflammation; migraine; and anti-infective clarithromycin, as well as provides influenza vaccines and products that regulate physiological rhythm of the colon. The company’s Diagnostic Products segment offers laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics systems that automates the extraction, purification, and preparation of DNA and RNA from patient samples, as well as detects and measures infectious agents; cartridges for blood analysis; rapid diagnostics systems; molecular point-of-care testing for HIV, influenza A and B, RSV, and strep A; cardiometabolic test systems; drug and alcohol test systems, as well as remote patient monitoring and consumer self-test systems; and informatics and automation solutions for use in laboratories. Its Nutritional Products segment provides pediatric and adult nutritional products. The company’s Medical Devices segment offers rhythm management, electrophysiology, heart failure, vascular, and structural heart devices for the treatment of cardiovascular diseases, as well as neuromodulation devices for the management of chronic pain and movement disorders. This segment also provides glucose and blood glucose monitoring systems. Abbott Laboratories has an agreement with Tandem Diabetes Care to develop and commercialize integrated diabetes solutions. The company was founded in 1888 and is headquartered in North Chicago, Illinois.
