ABT - Embedded Expectations Analysis - 2018 09 12
Abbott Laboratories (ABT:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 22.0x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, however, management has concerns about their ability to improve their rapid diagnostics business and sustain strong sales in their nutrition segmentSpecifically, management may be concerned about their transition into the rapid diagnostics business, particularly about their ability to integrate and stabilize the segment. Additionally, they may lack confidence in their ability to sustain elevated sales levels, and may be concerned about volatility in their nutrition segment. Furthermore, they may lack confidence in their ability to drive earnings growth and to enhance existing products. Moreover, they may lack confidence in their investments in capacity expansion, and may be exaggerating their automated manufacturing capabilities. Finally, they may be concerned about their lack of recent M&A activity
Abbott Laboratories is engaged in the discovery, development, manufacture, and sale of a range of health care products. The company's reportable segments are: established pharmaceutical products, which includes a range of generic pharmaceuticals; diagnostic products, which includes a range of diagnostic systems and tests; nutritional products, which includes a range of pediatric and adult nutritional products; and medical devices, which includes a range of rhythm management, electrophysiology, heart failure, vascular and structural heart devices for the treatment of cardiovascular diseases, and diabetes care products for people with diabetes, as well as neuromodulation devices.
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