As of June 4, 2025, Abbott Laboratories's estimated intrinsic value ranges from $70.73 to $299.55 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $167.72 | +25.4% |
| Discounted Cash Flow (5Y) | $147.52 | +10.3% |
| Dividend Discount Model (Multi-Stage) | $118.76 | -11.2% |
| Dividend Discount Model (Stable) | $299.55 | +124.0% |
| Earnings Power Value | $70.73 | -47.1% |
Is Abbott Laboratories (ABT) undervalued or overvalued?
With the current market price at $133.71, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Abbott Laboratories's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.55 | 0.72 |
| Cost of equity | 6.4% | 8.9% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 14.0% | 15.1% |
| Debt/Equity ratio | 0.06 | 0.06 |
| After-tax WACC | 6.2% | 8.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $148 | $263,369M | 86.0% |
| 10-Year Growth | $168 | $298,521M | 74.0% |
| 5-Year EBITDA | $112 | $200,905M | 81.6% |
| 10-Year EBITDA | $131 | $235,099M | 67.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $9,359M |
| Discount Rate (WACC) | 8.6% - 6.2% |
| Enterprise Value | $108,810M - $150,729M |
| Net Debt | $6,710M |
| Equity Value | $102,100M - $144,019M |
| Outstanding Shares | 1,740M |
| Fair Value | $59 - $83 |
| Selected Fair Value | $70.73 |
| Metric | Value |
|---|---|
| Market Capitalization | $232634M |
| Enterprise Value | $239344M |
| Trailing P/E | 17.23 |
| Forward P/E | 32.80 |
| Trailing EV/EBITDA | 15.40 |
| Current Dividend Yield | 168.02% |
| Dividend Growth Rate (5Y) | 10.64% |
| Debt-to-Equity Ratio | 0.06 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $50.32 |
| Discounted Cash Flow (5Y) | 25% | $36.88 |
| Dividend Discount Model (Multi-Stage) | 20% | $23.75 |
| Dividend Discount Model (Stable) | 15% | $44.93 |
| Earnings Power Value | 10% | $7.07 |
| Weighted Average | 100% | $162.96 |
Based on our comprehensive valuation analysis, Abbott Laboratories's weighted average intrinsic value is $162.96, which is approximately 21.9% above the current market price of $133.71.
Key investment considerations:
Given these factors, we believe Abbott Laboratories is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.