Near Perfect Ratings And Upward Trend Channel Are Good News For Abbott Labs

Pouring over charts this past weekend, I was struck by the weekly chart of Abbott Laboratories (ABT). Over the last 12 months, a rather tight upwardly-sloped channel has formed and the stock is near the lower rail currently. We will look at the chart later because I was even more impressed when I looked at the fundamental ratings for the stock.

When I looked at the fundamental screener from Tickeron, Abbott scored well in five different categories and didn’t have any negative ratings. Two areas where the company did extremely well were the Valuation rating and the Profit vs. Risk rating. The three other ratings that were positive were the Outlook rating, the Price Growth rating, and the Seasonality Score.

Breaking down the valuation rating, the stock is trading with a trailing P/E of 33.5 and a forward P/E of 24.2. The trailing PEG ratio is at 2.35 and forward PEG ratio is 1.48. The forward PEG is considerably lower than the industry average.

The profit vs. risk rating is based on the balance between profit, volatility, and drawdown. Given the tight upward trend I mentioned earlier and the profitability measurements for the company, I can’t say I’m surprised that Abbott scored well in this category. The return on equity is 20.5% and the profit margin is 22.3%. Both of those indicators are well above the industry averages.

(Click on image to enlarge)

Looking at other fundamental indicators, Abbott has seen solid earnings and revenue growth over the last few years, but that growth has really accelerated in recent quarters. The average annual EPS growth rate for the last three years is 10%, but the most recent quarter saw earnings jump 53%.

Revenue has grown at a rate of 6% per year over the last three years and it jumped 29% in the fourth quarter of 2020. Analysts expect revenue to grow by 38.8% in the first quarter of 2021 and by 22.1% for 2021 as a whole. Earnings are expected to grow by 95.4% in the first quarter and by 38.4% for the year.

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