Abbott Laboratories (ABT) Intrinsic Value & DCF Valuation
Medical - Devices · NYSE
Current Price
$103.49
Intrinsic Value
$127.24
+18.7% margin of safety
What Is Abbott Laboratories's Intrinsic Value?
As of 2026-10-28, the base-case DCF model estimates the intrinsic value of Abbott Laboratories (ABT) at $127.24 per share, compared with a market price of $103.49, a margin of safety of +18.7%. The base case assumes 9.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $103.27 to $154.7. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Abbott Laboratories (ABT) Undervalued?
At $103.49, ABT trades about 18.7% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Diversified Product Portfolio
Abbott's broad range of medical devices, diagnostics, nutritionals, and branded generic pharmaceuticals creates resilience. This diversification reduces reliance on any single product category.
↑Strong Brand Recognition & Trust
Decades of established presence have built significant trust with healthcare professionals and consumers. This brand equity translates into preferred adoption of its products.
↑Extensive Distribution Network
A well-established global sales and distribution infrastructure ensures broad market access. This network is difficult and costly for competitors to replicate.
INVESTMENT RISKS
↓Product Recall and Safety Concerns
Any significant product recall or safety issue could severely damage reputation and lead to substantial financial penalties. This is a constant threat in the medical device industry.
↓Healthcare Policy and Reimbursement Changes
Shifts in government healthcare policies or changes in reimbursement rates can impact demand and profitability for Abbott's products. This creates market uncertainty.
↓Innovation Pace and Technological Obsolescence
The rapid pace of technological advancement requires continuous R&D investment. Failure to innovate or adapt to new technologies could lead to market share erosion.
Base case
ABT base case valuation
Intrinsic Value
$127.24
Margin of safety
+18.7%
Expected annual return
+4.2%
Base case assumptions: 9.7% annual growth, 10.0% discount rate, 20.46x exit multiple, 5 year projection. Data as of 2026-10-28.
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)
$27.75
FCF/Share (TTM)
$5.02
ROIC (TTM)
5.6%
ROE (TTM)
9.1%
P/FCF
20.5x
EV/EBITDA
21.2x
FCF Yield
4.89%
Debt/Equity
0.64x
On a trailing twelve-month basis, ABT generates free cash flow per share of $5.02 alongside a ROIC of 5.6%, both central inputs for a DCF valuation. Its P/FCF ratio of 20.5x and FCF yield of 4.89% then frame how ABT is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of ABT?
Abbott Laboratories currently generates $5.02 in free cash flow per share. At the current price of $103.49, 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 20.5x with a free cash flow yield of 4.89%. 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 ($5.02) 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 0.64x, 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 5.6% means the company's return on invested capital sits below the level that typically clears 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 0.64x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 21.2x, 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 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.