Is Abbott Laboratories (ABT) overvalued?
On Equity Rank's model estimate, ABT trades close to its fair value (1% below it). Abbott Laboratories (ABT) last closed at $109.93; the multi-method model fair value is $111.41.
| Price | Model fair value | Price vs model |
|---|---|---|
| $109.93 | $111.41 | 1% below |
What the answer rests on
- 4 of 9 valuation methods put ABT's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, ABT's free cash flow would need to grow about 5.2% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -1.8% a year.
- ABT trades at 42.9 times its last year's earnings, against a median of 30.9 for 37 profitable Medical Devices companies.
- Over the past year the price sat below the model fair value on 76% of trading days. The gap ranged from 21% below to 28% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ABT's fair value · What prices assume · Other companies