Abbott Laboratories, together with its subsidiaries, discovers, develops, manufactures, and sells health care products worldwide. It operates in four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. The Established Pharmaceutical Products segment provides generic pharmaceuticals for the treatment of pancreatic exocrine insufficiency, irritable bowel syndrome or biliary spasm, intrahepatic cholestasis or depressive symptoms, gynecological disorder, hormone replacement therapy, dyslipidemia, hypertension, hypothyroidism, Ménière's disease and vestibular vertigo, pain, fever, inflammation, and migraine, as well as provides anti-infective clarithromycin, influenza vaccine, and products to regulate physiological rhythm of the colon. The Diagnostic Products segment offers laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics systems that automate the extraction, purification, and preparation of DNA and RNA from patient samples, as well as detect and measure infectious agents; point of care systems; cartridges for testing blood; rapid diagnostics lateral flow testing products; molecular point-of-care testing for HIV, SARS-CoV-2, influenza A and B, RSV, and strep A; cardiometabolic test systems; drug and alcohol test, and remote patient monitoring and consumer self-test systems; and informatics and automation solutions for use in laboratories. The Nutritional Products segment provides pediatric and adult nutritional products. The Medical Devices segment offers rhythm management, electrophysiology, heart failure, vascular, and structural heart devices for the treatment of cardiovascular diseases; and diabetes care products, as well as neuromodulation devices for the management of chronic pain and movement disorders. Abbott Laboratories was founded in 1888 and is based in North Chicago, Illinois.
Discounted Cash Flow Valuation of Abbott Laboratories
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +11%.
The trend of Net Margin over the past 5 years is +2.8%.
The average ROA over the past 5 years is +7.48%.
The trend of ROA over the past 5 years is +1.7%.
The average ROE over the past 5 years is +12.11%.
The trend of ROE over the past 5 years is +3.53%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 3.46.
The trend of Debt/FCF over the past 5 years is -0.74.
Graham’s Stability measure stands at 0.17.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +9.77%.
The trend of Revenue growth rate over the past 5 years is +1.52%.
The Earnings CAGR over the past 5 years is +71.31%.
The trend of Earnings growth rate over the past 5 years is +3.85%.
The Equity CAGR over the past 5 years is +3.48%.
The trend of Equity growth rate over the past 5 years is +1.12%.
The FCF CAGR over the past 5 years is +11.97%.
The trend of FCF growth rate over the past 5 years is -8.4%.