Quashing Thoughts Of An Abbott Laboratories (ABT) Exodus

On 06 December, shares of Abbott Laboratories (NYSE:ABT) closed higher after a volatile session. The shares accumulated 0.04 points or 0.06 percent at $71.54 with a heavy trade volume of 10.032 million shares. After opening the session at $70.59, the shares went as high as $71.54 and as low as $69.92, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $126 billion and now has 1.76 billion shares outstanding. Abbott Laboratories (ABT) stock has gained 1.63 percent of market value in 21 trading days.

ABT stock has a trailing 3-year beta of 1.41, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.32 a share in the trailing twelve months. The stock’s value has surged 25.35 percent year to date (YTD) against a rise of 30.57 percent in 12 month’s time. The company’s shares still trade -4.51 percent away from its 1-year high of $74.92 and 31.7 percent up from 52-week low of $54.32. The average consensus rating on the company is 1.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Abbott Laboratories (ABT) will probably climb 10.67 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $86-month high price target. This represents a whopping 20.21 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $80, which represents a return potential of 11.83 percent when compared to the closing price of the stock of $71.54 on Thursday, December 06. The lowest price target for the stock is $60 — slightly more than -16.13 percent from ABT’s current share price.

History has shown that shares in Abbott Laboratories have gone up on 18 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. Investors will get their next glimpse of ABT’s Q4 earnings on January 23. Analysts are forecasting revenue to climb 3.1 percent to $7.82B in the fiscal fourth quarter, while earnings are seen soaring by nearly 9.46 percent to $0.81 per share. It earned $0.75 per share, in line with the $0.75, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $7.66B, better than the $7.65B analysts expected. Earnings are estimated to increase by 44.6 percent this year, 11.03 percent next year and continue to increase by 11.47 percent annually for the next 5 years.

Let’s take a look at some insider activity at Abbott Laboratories (NYSE:ABT) and see the pattern. The earliest insider trade took place on 11/28/2018. White Miles D parted with a total of 142.34 thousand shares of company at average share price of $72.35. The total for the sales was set at $10.3 million. After this transaction, the Chairman and CEO account balance stood at 3.32 million shares. The stock lost -1.17 percent since that insider sale. On 11/28/2018, White Miles D, Chairman and CEO, sold 177.14 thousand shares at a price per share of $72.49. This removed 12.84 million shares from the insider’s fortune and the stock saw a -1.37 percent retreat in value since the news became public. This transaction left 3.14 million shares in the Chairman and CEO account.

On 11/28/2018, Chairman and CEO White Miles D performed a sale transaction worth $400.57 thousand. This sale at $72.58 each has eliminated 5.52 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -1.49 percent decrease since the transaction was reported. The insider now is left with 3.17 million shares remaining in the account. Watkin Jared, who performs the Senior Vice President job, sold 65 thousand shares for $4.62 million. The disposal occurred on 11/02/2018 was priced at $71 per share. The share price soared 0.7 percent since the reporting date. Watkin Jared now left with a stake of 64.16 thousand ABT stock worth $4.59 million after the insider selling.

The stock is currently hovering around the first support level of $70.46. Below this, the next support is placed in the zone of $69.38. Till the time, the ABT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 51.51 on daily chart, which may remain a cause for concern. If the price breaks below $69.38 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $72.08 mark may result into a pull-back move towards $72.62 level.

Shares of Abbott Laboratories (ABT) are trading at a P/E ratio of 52.81 times earnings reported for the past 12 months. The industry ABT operates in has an average P/E of 30.69. Its P/E ratio went as low as 25.95X and as high as 55.06 over the 5-year span.Further, it is sporting a 4.14 on the Price-to-Sales ratio. Compare this with the industry average P/S of 5.95. 58 percent is the gross profit margin for Abbott Laboratories and operating margin sits at 10.2 percent. Along with this, the net profit margin is 2.9 percent.