Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St.
If you are wondering whether Abbott Laboratories at around US$87.41 is a bargain or a value trap, it helps to step back and look at what the current price really implies.
The stock has gained 3.5% over the past week, although it remains down 4.7% over the past month and has declined 29.6% year to date and 32.1% over the last year, which may have shifted how investors view its risk and potential reward.
Recent coverage has focused on Abbott Laboratories as a large healthcare stock with a long operating history, which keeps it on the radar for investors tracking established medical device and diagnostics companies. This context matters because long term players often reassess what they are willing to pay for stability when share prices have already fallen.
On Simply Wall St’s valuation model, Abbott Laboratories currently scores a full 6 out of 6 on its valuation checks. This sets up a closer look at how different valuation methods stack up and hints at an even more useful way to interpret that fair value later in the article.
Find out why Abbott Laboratories’s -32.1% return over the last year is lagging behind its peers.
Approach 1: Abbott Laboratories Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s dollars, aiming to estimate what the entire business might be worth right now.
For Abbott Laboratories, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $7.1b. Analyst inputs run through 2028, with Simply Wall St extending those projections further out, and the 2035 free cash flow estimate sits at about $14.8b. These yearly cash flows, including discounted values such as $7.9b in 2026 and $8.3b in 2028, are all converted into today’s value and then divided by the number of shares to reach an intrinsic value per share.
That process results in an estimated fair value of about $136.13 per share. Compared with the recent share price around $87.41, the DCF output implies the stock is roughly 35.8% undervalued on these assumptions.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Abbott Laboratories is undervalued by 35.8%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.
ABT Discounted Cash Flow as at May 2026
Story Continues
Approach 2: Abbott Laboratories Price vs Earnings
For profitable companies, the P/E ratio is a straightforward way to connect what you pay for the stock with the earnings the business is currently generating. It helps you see how many dollars investors are willing to pay today for each dollar of earnings.
What counts as a “normal” P/E depends on what investors expect for future growth and how much risk they see. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually points to a lower one.
Abbott Laboratories currently trades on a P/E of about 24.4x. That is close to the Medical Equipment industry average of about 24.5x and below the peer group average of roughly 33.6x. Simply Wall St also calculates a “Fair Ratio” of about 30.5x, which is the P/E level suggested for Abbott Laboratories based on factors such as earnings growth, industry, profit margins, market cap and risk profile.
This Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for the company’s specific characteristics rather than assuming all companies deserve the same multiple. Since the Fair Ratio of 30.5x sits above the current P/E of 24.4x, the preferred multiple suggests the stock is trading below that tailored fair value range.
Result: UNDERVALUED
NYSE:ABT P/E Ratio as at May 2026
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.
Upgrade Your Decision Making: Choose your Abbott Laboratories Narrative
Earlier the focus was on DCF and P/E, but there is an even better way to connect those numbers to your own view of Abbott Laboratories. That is through Narratives on Simply Wall St’s Community page, where you set a story for the company, link that story to a forecast for revenue, earnings and margins, and then see the fair value that drops out of those assumptions, all updated automatically as new news or earnings land.
A Narrative is simply your explanation of what you think is really driving Abbott Laboratories, tied directly to a financial model instead of sitting in a notebook. This allows you to compare the fair value from your story with the current share price and decide whether the stock looks attractive, fully priced or expensive on your terms rather than someone else’s.
For example, one Abbott Laboratories Narrative on the platform currently points to a fair value of about $113.88 per share, while another sits higher at about $118.64. That spread shows how two investors looking at the same company, data and risks can reach different but clearly quantified views that you can use as reference points for your own decision making.
Do you think there’s more to the story for Abbott Laboratories? Head over to our Community to see what others are saying!
NYSE:ABT 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ABT.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com