Divergent Views Emerge on Abbott Laboratories’ Stock Valuation

Abbott Laboratories US0028241000

Shares of Abbott Laboratories are presenting a complex picture to the market. Despite recent short-term price weakness, significant institutional investors are demonstrating confidence by increasing their stakes. This activity unfolds alongside a notable debate regarding the company's fair value.

A sharp divergence exists in how different analytical models assess Abbott's stock. A discounted cash flow (DCF) analysis suggests an intrinsic value of approximately $72.88 per share. At a recent trading price of around $125.40, this would imply the stock is overvalued by about 72%. In contrast, a "Fair Ratio" model, which incorporates growth and risk premiums, calculates a fair price-to-earnings multiple of 25.5. When measured against this benchmark, Abbott's equity appears to be undervalued.

Major Funds Amplify Their Holdings

This valuation uncertainty has not deterred several large institutional players. Recent filings reveal substantial purchases were made during the second quarter. First Trust Advisors LP boosted its position by 180.7%, bringing its total holding to a value of roughly $416.66 million. Separately, Seaview Investment Managers LLC established a new position worth approximately $11.07 million. Cerity Partners LLC also increased its investment, adding a further 2.1% to its stake.

Operational Performance and Price Action

The company's underlying business continues to perform solidly. For the third quarter, Abbott reported revenue of $11.37 billion, a 6.9% year-over-year increase. Earnings per share came in at $1.30, meeting market expectations. Management reaffirmed its full-year adjusted EPS guidance, projecting a range between $5.12 and $5.18.

Despite this operational strength, the share price experienced a 2.44% decline in the week ending December 5. However, on a year-to-date basis, the stock remains in positive territory with a gain of 10.5%.

Analyst Outlook and Corporate Developments

The consensus rating among market analysts remains "Moderate Buy," with an average price target of $147.00. Beyond financials, Abbott has been active on other fronts, launching two new protein shakes and providing successful support for a blood donation initiative. Investors are now looking ahead to the release of the company's final 2025 annual figures for the next significant market update.