Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Image Shown: We use a discounted cash flow model to derive a fair value estimate range for companies in our coverage. The high end of our fair value estimate range for Abbott is $125 per share. We're maintaining this range after its first-quarter 2021 report. Image Source: Valuentum's 16-page stock report of Abbott.

Presentation: How to Use our 16-page Stock Reports (pdf) >> 

By Callum Turcan

On April 20, Abbott Laboratories (ABT) reported first quarter 2021 earnings that missed consensus top-line estimates but beat consensus bottom-line estimates. Last quarter, Abbott Laboratories’ ‘Diagnostics’ revenues more than doubled year-over-year due primarily to its COVID-19 pandemic-related offerings, while its ‘Medical Device’ and ‘Nutrition’ revenues were up 9% and 6% year-over-year on an organic basis, respectively. Additionally, its internationally-oriented ‘Established Pharmaceuticals’ unit posted 6% year-over-year organic sales growth last quarter.

Image Shown: Abbott Laboratories’ financial performance during the first quarter of 2021 received a massive boost from its diagnostics offerings relating to the ongoing coronavirus (‘COVID-19’) pandemic. Image Source: Abbott Laboratories – First Quarter of 2021 IR Earnings Infographic

The company left its full-year non-GAAP adjusted EPS guidance for 2021 unchanged at $5.00 per share, which if realized would represent annual growth north of 35%. However, shares of ABT fell that day during normal trading hours as investors were apparently hoping for stronger full-year guidance. Under GAAP rules, Abbott Laboratories expects to post $3.74 in diluted EPS this year. In the first quarter of 2021, the company’s GAAP revenues and GAAP operating income grew by 35% and 178%, respectively, on a year-over-year basis.

Image Shown: Abbott Laboratories expects solid growth in 2021, but the Street was expecting more. Image Source: Abbott Laboratories – First Quarter of 2021 IR Earnings Infographic

Wrapping Things Up

We like Abbott Laboratories a lot, but we do not include shares in any of our newsletter portfolios and do not currently have plans to do so. Shares of ABT are trading near the high end of our fair value estimate range as of this writing, indicating shares are fairly valued at this time. We expect to tweak Abbott Laboratories' fair value estimate moderately following the report, though we don't expect a major fair value revision. Shares of ABT yield ~1.5% as of this writing. Its Dividend Cushion ratio currently stands at 2.8. 

More Information

Valuentum's Dividend Growth Newsletter portfolio >>

Efficacy of the Dividend Cushion ratio >>

---

Abbott Laboratories' 16-page Stock Report >>

Abbott Laboratories Dividend Report >>

-----

Health Care Bellwethers Industry - JNJ, WBA, CVS, ISRG, MDT, ZBH, BAX, BDX, BSX, MTD, SYK, BIIB, GILD, ABT, ABBV, LLY, AMGN, BMY, MRK, PFE, VRTX, ZTS, REGN, UNH

Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.

Callum Turcan does not own shares in any of the securities mentioned above. Johnson & Johnson (JNJ) and Health Care Select Sector SDPR Fund (XLV) are both included in Valuentum’s simulated Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio. Vertex Pharmaceuticals Inc (VRTX) is included in Valuentum’s simulated Best Ideas Newsletter portfolio. UnitedHealth Group Inc (UNH) is included in Valuentum’s simulated Dividend Growth Newsletter portfolio. Vanguard Consumer Staples ETF (VDC) is included in Valuentum’s simulated High Yield Dividend Newsletter portfolio. Some of the other companies written about in this article may be included in Valuentum's simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.