Abbott Laboratories (ABT) Stock Valuation — DCF Analysis
Medical - Devices · NYSE
Current Price
$88.18
Intrinsic Value
$110.97
+20.5% margin of safety
COMPETITIVE MOAT
↑Diabetes Monitoring Leadership
Abbott's FreeStyle Libre system, now including ketone monitoring with Libre Duo, addresses a critical gap in diabetes care. This innovation helps patients and doctors detect DKA risks earlier, solidifying their position in a vital market.
↑Diversified Medical Portfolio
Beyond diabetes, Abbott maintains a broad range of medical devices and diagnostics. This diversification across various healthcare segments provides resilience against sector-specific downturns and regulatory changes.
↑Strong Brand Recognition
Abbott's established brands, like PediaSure, have built significant consumer trust over time. While facing scrutiny, this long-standing brand equity can aid in navigating and recovering from reputational challenges.
INVESTMENT RISKS
↓PediaSure Lawsuit
Abbott faces a class-action lawsuit alleging misleading claims for PediaSure. This litigation could result in financial penalties and damage brand reputation, impacting sales and consumer confidence.
↓DKA Awareness Gap
New data highlight that many diabetics may not recognize DKA symptoms. While Abbott is innovating, widespread patient education and routine ketone monitoring adoption remain challenges.
↓Regulatory Scrutiny
The medical device industry is subject to stringent regulations. Any future adverse findings or product recalls could lead to significant financial and operational disruptions.
Base case
ABT base case valuation
A base case discounted cash flow model for ABT estimates an intrinsic value of about $110.97 per share, against a current price of $88.18. The model assumes 10.2% annual free cash flow growth, a 10.0% discount rate, and a 21x exit multiple.
Intrinsic Value
$110.97
Margin of safety
+20.5%
Expected annual return
+4.7%
Base case assumptions: 10.2% annual growth, 10.0% discount rate, 21x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ABT valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Abbott Laboratories respond.
Open DCF Calculator for ABTCompany Overview
Abbott Laboratories, along with its affiliated entities, is a global healthcare enterprise dedicated to the research, development, manufacturing, and worldwide distribution of a diverse portfolio of health solutions. The company operates through four primary divisions: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. In the Established Pharmaceutical Products segment, Abbott provides generic medications designed to treat a wide array of conditions, including pancreatic exocrine insufficiency, irritable bowel syndrome or biliary spasm, intrahepatic cholestasis or depressive symptoms, gynecological disorders, hormone replacement therapy, dyslipidemia, hypertension, hypothyroidism, Ménière's disease and vestibular vertigo, pain, fever, inflammation, and migraine. This segment also supplies the anti-infective clarithromycin, influenza vaccines, and products aimed at regulating colon physiology. The Diagnostic Products division offers a comprehensive suite of diagnostic tools. These include laboratory systems for 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 quantify infectious agents. Additionally, this segment provides point-of-care systems, blood testing cartridges, rapid lateral flow testing products, and specialized molecular point-of-care tests for pathogens such as HIV, SARS-CoV-2, influenza A and B, RSV, and strep A. Its offerings also extend to cardiometabolic test systems, drug and alcohol screening solutions, remote patient monitoring, consumer self-test systems, and sophisticated informatics and automation solutions for laboratory use. The Nutritional Products segment is responsible for delivering nutritional formulations tailored for both pediatric and adult populations. Finally, the Medical Devices segment develops and commercializes rhythm management, electrophysiology, heart failure, vascular, and structural heart devices for the treatment of cardiovascular ailments. It also supplies diabetes care products and neuromodulation devices designed for the management of chronic pain and movement disorders. Founded in 1888, Abbott Laboratories maintains its corporate headquarters in North Chicago, Illinois.
Financial Metrics — ABT Stock Valuation Data
Revenue/Share (TTM)
$25.84
FCF/Share (TTM)
$4.22
ROIC (TTM)
6.6%
ROE (TTM)
12.2%
P/FCF
20.8x
EV/EBITDA
17.3x
FCF Yield
4.80%
Debt/Equity
0.65x
Based on trailing twelve-month data, ABT shows a free cash flow per share of $4.22 and a ROIC of 6.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 20.8x and FCF yield of 4.80% are important context metrics when evaluating ABT's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ABT?
Abbott Laboratories currently generates $4.22 in free cash flow per share. At the current price of $88.18, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ABT undervalued?
ABT trades at a P/FCF ratio of 20.8x with a free cash flow yield of 4.80%. This P/FCF is in a moderate range. However, whether ABT is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ABT stock using DCF?
To perform a DCF valuation on Abbott Laboratories: (1) Start with the trailing free cash flow per share ($4.22) as the base, (2) project future FCF growth over 5-10 years based on Medical - Devices industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ABT's risk profile — with a debt-to-equity of 0.65x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ABT?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Abbott Laboratories, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Medical - Devices trends, then discounting those amounts to today's dollars. ABT's ROIC of 6.6% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect ABT stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ABT, with a debt-to-equity ratio of 0.65x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 17.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ABT PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value ABT with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.