Earnings Estimates Rising for Abbott (ABT): Will It Gain?
Abbott (ABT) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.
Abbott (ABT) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this maker of infant formula, medical devices and drugs is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Abbott, as there has been strong agreement among the covering analysts in raising estimates.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The company is expected to earn $1.16 per share for the current quarter, which represents a year-over-year change of -20%.
Over the last 30 days, seven estimates have moved higher for Abbott compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 14.6%.
Current-Year Estimate Revisions
The company is expected to earn $5.05 per share for the full year, which represents a change of +38.36% from the prior-year number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Abbott. Over the past month, 10 estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 14.4%.
Favorable Zacks Rank
Thanks to promising estimate revisions, Abbott currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
While strong estimate revisions for Abbott have attracted decent investments and pushed the stock 7.9% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
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