ABT
Abbott Laboratories
$87.41
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 9.4% above fair value
You pay
$87.41
Bear
$63.89
Fair
$79.87
Bull
$95.84
Bear
$63.89
-26.9%
$3.96 × 12x P/E
Fair
$79.87
-8.6%
$3.96 × 15x P/E
Bull
$95.84
+9.6%
$3.96 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
22.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $127.46 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $79.87 per share.
Warnings
Dividend-based valuation: $117.72 (above our primary estimate by 98%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $127.46 (from 41 analysts). Our estimate is 53% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples