Abbott Laboratories (ABT) Stock Valuation — PE Analysis
Medical - Devices · NYSE
Current Price
$88.18
PE Ratio (TTM)
24.5x
Intrinsic Value
$108.42
+18.7% 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 PE valuation
A base case PE valuation for ABT estimates a fair value of about $108.42 per share, against a current price of $88.18. The model assumes 10.2% annual earnings growth, a 25x target PE multiple, and a 10% discount rate.
Intrinsic Value
$108.42
Margin of safety
+18.7%
Expected annual return
+4.2%
Base case assumptions: 10.2% annual earnings growth, 25x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ABT PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Abbott Laboratories respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
24.5x
PEG Ratio
n/m
Earnings Yield
4.07%
ROE (TTM)
12.2%
Revenue/Share (TTM)
$25.84
Dividend Yield
2.77%
Debt/Equity
0.65x
Frequently Asked Questions
What is the PE ratio of ABT?
The trailing twelve-month PE ratio of ABT reflects how much investors pay per dollar of Abbott Laboratories's earnings. This metric is most useful when compared to Medical - Devices peers and the company's own historical range.
Is ABT overvalued based on PE ratio?
ABT's PE of 24.5x combined with a PEG ratio of -0.46 provides a growth-adjusted perspective. ABT has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Medical - Devices, a DCF analysis may be more appropriate.
How do I value ABT stock using PE ratio?
To value Abbott Laboratories using PE: (1) Compare the current PE (24.5x) against the Medical - Devices median to assess relative pricing, (2) check the PEG ratio (-0.46) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ABT?
ABT's PEG ratio is -0.46, calculated by dividing the PE ratio (24.5x) by the expected earnings growth rate. Because ABT has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ABT stock valuation?
PE ratio gives a quick relative read — how ABT is priced versus Medical - Devices peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ABT DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Healthcare valuationsP/E and DCF value ABT with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.