Abbott Laboratories

ABT

Pharmaceutical Preparations

Mkt Cap

$177.4B

PE

31.63

Debt

$14.59B

Cash

$6.284B

EV

$185.7B

FCF

$4.923B

Market Cap

$177.4B

P/E Ratio

31.63

Debt

$14.59B

Cash

$6.284B

EV

$185.7B

FCF

$4.923B

Charts data: {"Earnings":[{"time":"2014-12-30","value":2273000000},{"time":"2015-12-30","value":4403000000},{"time":"2016-12-30","value":1393000000},{"time":"2017-12-30","value":468000000},{"time":"2018-12-30","value":2353000000},{"time":"2019-12-30","value":3666000000},{"time":"2020-12-30","value":4473000000},{"time":"2021-12-30","value":7042000000},{"time":"2022-12-30","value":6905000000},{"time":"2023-12-30","value":5701000000}],"Sales":[{"time":"2014-12-30","value":20247000000},{"time":"2015-12-30","value":20405000000},{"time":"2016-12-30","value":20853000000},{"time":"2017-12-30","value":27390000000},{"time":"2018-12-30","value":30578000000},{"time":"2019-12-30","value":31904000000},{"time":"2020-12-30","value":34608000000},{"time":"2021-12-30","value":43075000000},{"time":"2022-12-30","value":43653000000},{"time":"2023-12-30","value":40109000000}],"Net Margins":[{"time":"2014-12-30","value":0.11226354521657529},{"time":"2015-12-30","value":0.2157804459691252},{"time":"2016-12-30","value":0.06680093991272239},{"time":"2017-12-30","value":0.017086527929901424},{"time":"2018-12-30","value":0.0769507489044411},{"time":"2019-12-30","value":0.11490722166499498},{"time":"2020-12-30","value":0.12924757281553398},{"time":"2021-12-30","value":0.16348229831688915},{"time":"2022-12-30","value":0.15817927748379262},{"time":"2023-12-30","value":0.1421376748360717}],"Assets":[{"time":"2014-12-30","value":41275000000},{"time":"2015-12-30","value":41247000000},{"time":"2016-12-30","value":52666000000},{"time":"2017-12-30","value":76250000000},{"time":"2018-12-30","value":67173000000},{"time":"2019-12-30","value":67887000000},{"time":"2020-12-30","value":72548000000},{"time":"2021-12-30","value":75196000000},{"time":"2022-12-30","value":74438000000},{"time":"2023-12-30","value":73214000000}],"Stockholders Equity":[{"time":"2014-12-30","value":21639000000},{"time":"2015-12-30","value":21326000000},{"time":"2016-12-30","value":20717000000},{"time":"2017-12-30","value":31098000000},{"time":"2018-12-30","value":30722000000},{"time":"2019-12-30","value":31301000000},{"time":"2020-12-30","value":33003000000},{"time":"2021-12-30","value":36024000000},{"time":"2022-12-30","value":36905000000},{"time":"2023-12-30","value":38827000000}],"ROE":[{"time":"2014-12-30","value":0.10504182263505707},{"time":"2015-12-30","value":0.2064615961736847},{"time":"2016-12-30","value":0.06723946517352898},{"time":"2017-12-30","value":0.015049199305421571},{"time":"2018-12-30","value":0.07659006575092768},{"time":"2019-12-30","value":0.11712085875850611},{"time":"2020-12-30","value":0.13553313335151349},{"time":"2021-12-30","value":0.19548079058405507},{"time":"2022-12-30","value":0.18710201869665358},{"time":"2023-12-30","value":0.14683081360908645}],"ROA":[{"time":"2014-12-30","value":0.06296789824348879},{"time":"2015-12-30","value":0.07716924867263074},{"time":"2016-12-30","value":0.06047544905631717},{"time":"2017-12-30","value":0.029259016393442625},{"time":"2018-12-30","value":0.054337308144641445},{"time":"2019-12-30","value":0.06675799490329518},{"time":"2020-12-30","value":0.07384076749186745},{"time":"2021-12-30","value":0.11204053407096122},{"time":"2022-12-30","value":0.11233509766517101},{"time":"2023-12-30","value":0.09102084300816783}]}

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.

Sector

10-Q
9/30/23
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10-K
12/31/22
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3/31/22
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12/31/21
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12/31/19
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3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Abbott Laboratories

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$4.923B	$5.837B	$6.833B	$7.896B	$9.005B	$10.13B	$11.25B	$12.32B	$13.31B	$14.18B	$14.89B	$148.9B
DCF		$5.076B	$5.167B	$5.192B	$5.148B	$5.038B	$4.864B	$4.633B	$4.351B	$4.03B	$3.679B	$36.79B
Value	$83.97B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 20%

Earnings Stability 38%

Competitiveness and MOAT

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 Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	22%	6.7%	1.7%	7.7%	11%	13%	16%	16%	14%	14%
ROA	7.7%	6%	2.9%	5.4%	6.7%	7.4%	11%	11%	9.1%	9%
ROE	21%	6.7%	1.5%	7.7%	12%	14%	20%	19%	15%	14%

What is the average Net Margin?

The average Net Margin over the past 5 years is +13.08%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.4%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +8.51%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.02%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +14.31%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +1.77%.

Safety & Stabiliy

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.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	5.58	11.98	6.36	3.99	4.27	3.28	2.17	2.44	3.12	2.96
Debt Equity	0.42	1.06	0.91	0.64	0.61	0.57	0.52	0.52	0.41	0.37
MIN
Graham Stability	-	-	17%	100%	100%	100%	100%	100%	93%	17%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.96.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.31.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.17.

Growth

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.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	9.8%	5.6%	5%	-8.1%	-0.92%
Net Income	22%	19%	8.4%	-17%	-6.3%
Stockholders Equity	9.4%	4.8%	5.6%	5.2%	-0.55%
FCF	16%	0.62%	-4%	-35%	-11%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.58%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.92%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +19.36%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -6.31%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +4.79%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.55%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +0.62%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -11.22%.