{"id":34570,"date":"2023-07-12T08:16:53","date_gmt":"2023-07-12T12:16:53","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/lower-testing-demand-to-weigh-on-abbotts-q2\/"},"modified":"2023-07-12T08:16:55","modified_gmt":"2023-07-12T12:16:55","slug":"lower-testing-demand-to-weigh-on-abbotts-q2","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=34570","title":{"rendered":"Lower Testing Demand To Weigh On Abbott\u2019s Q2?"},"content":{"rendered":"<div>\n<p><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/ABT\/\">Abbott (NYSE: ABT)<\/strong><strong> <\/strong>will report its Q2 2023 results on Thursday, July 20. We expect the company to post revenue and earnings in line with the street expectations. Abbott will see a decline in sales given the forex headwinds and lower Covid-19-related testing demand. Although we expect Abbott to post an in-line Q2, our forecast indicates that ABT stock has some room for growth, as discussed below. Our interactive dashboard analysis of <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/ABT\/no-login-required\/hqAO75Mu\/Abbott-Laboratories-ABT-Earnings-Preview-ABT-Stock-Likely-To-See-Little-Movement-Due-To-Mixed-FY-2023Q2-Results-With-Revenues-Beating-Expectations-But-Earnings-Falling-Short?fromforbesandarticle=trefis230712\">Abbott Earnings Preview<\/strong> has additional details.<\/p>\n<p><strong>(1) Revenues are expected to be lower compared to the prior-year quarter<\/strong><\/p>\n<ul>\n<li>Trefis estimates Abbott\u2019s Q2 2023 revenues to be around $9.7 billion, reflecting a 14% y-o-y decline and aligning with the consensus estimate.<\/li>\n<li>The revenue decline can primarily be attributed to lower demand for Covid-19 testing and forex headwinds.<\/li>\n<li>For perspective, Abbott expects total Covid-19-related sales of $1.5 billion in 2023, compared to $8.4 billion last year.<\/li>\n<li>However, the company\u2019s other businesses &#8211; Medical Devices, Nutrition, and Established Pharmaceuticals &#8211; will likely continue to see steady sales growth, driven by a continued pick up in procedures volume.<\/li>\n<li>Looking at Q1, the company reported total revenue of $9.7 billion, down 18% y-o-y, primarily due to a 49% decline in Diagnostics sales.<\/li>\n<li>Our dashboard on<strong> <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/ABT\/no-login-required\/2DEO9Jsm\/Abbott-Revenues-How-Does-ABT-Make-Money-?fromforbesandarticle=trefis230712\">Abbott Revenues<\/strong><strong> <\/strong>offers more details on the company\u2019s segments.<\/li>\n<\/ul>\n<p><strong>(2) EPS likely to be in line with the consensus estimates<\/strong><\/p>\n<ul>\n<li>Abbott\u2019s Q2 2023 adjusted earnings per share is expected to be $1.05 per Trefis analysis, aligning with the consensus estimate.<\/li>\n<li>Abbott\u2019s adjusted net income of $1.8 billion in Q1 2023 reflected a 41% fall from its $3.1 billion figure in the prior-year quarter. This can be attributed to lower revenues and about 900 bps operating margin contraction due to higher costs. Our <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/ABT\/no-login-required\/4Yi9Tgf4\/Abbott-Laboratories-ABT-Operating-Income-Comparison?fromforbesandarticle=trefis230712\">Abbott Operating Income Comparison<\/strong> dashboard has more details.<\/li>\n<li>For the full-year 2023, we expect the adjusted EPS to be lower at $4.40, compared to $5.34 in 2022.<\/li>\n<\/ul>\n<p><strong>(3) ABT stock looks like it has more room for growth<\/strong><\/p>\n<ul>\n<li>We estimate <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/ABT\/no-login-required\/rlOQzYfL\/Abbott-ABT-Valuation-Is-ABT-Stock-Expensive-Or-Cheap-?fromforbesandarticle=trefis230712\">Abbott\u2019s Valuation<\/strong><strong> <\/strong>to be around $122 per share, about 15% above the current market price of $107.<\/li>\n<li>At its current levels, ABT stock is trading at a forward P\/E multiple of 24x based on our EPS estimate of $4.40 for 2023, aligning with its last three-year average.<\/li>\n<li>However, we have assigned a slightly higher P\/E multiple of around 28x, given that Abbott will likely return to earnings growth from 2024 after a decline in 2023. Abbott will see a dip in sales and earnings in 2023 owing to its diagnostics business. However, it should return to growth next year.<\/li>\n<li>If the company reports upbeat Q2 results and provides a 2023 outlook better than the street estimates, the P\/E multiple will likely be revised upward, resulting in higher levels for ABT stock.<\/li>\n<\/ul>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p>While ABT stock looks like it has more room for growth, it is helpful to see how <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/ABT\/topic\/peer-comparisons\">Abbott\u2019s Peers<\/strong> fare on metrics that matter. You will find other valuable comparisons for companies across industries at <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/topic\/peer-comparisons\">Peer Comparisons<\/strong><strong>.<\/strong><\/p>\n<p>What if you\u2019re looking for a more balanced portfolio instead? Here\u2019s a <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/RsQ6oXgC\/High-Quality-Portfolio-30-Stocks-with-189-Return-Since-2016-vs-88-for-S-P-500?fromforbesandarticle=trefis230712\">high-quality portfolio<\/strong> that\u2019s beaten the market consistently since 2016.<\/p>\n<p>Invest with <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/M7MacZNG?fromforbes\">Market Beating Portfolios<\/strong><\/p>\n<p>See all <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/price-estimates?fromforbes\">Price Estimates<\/strong><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/greatspeculations\/2023\/07\/12\/lower-testing-demand-to-weigh-on-abbotts-q2\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Abbott (NYSE: ABT) will report its Q2 2023 results on Thursday, July 20. We expect the company to post revenue and earnings in line with the street expectations. Abbott will see a decline in sales given the forex headwinds and lower Covid-19-related testing demand. Although we expect Abbott to post an in-line Q2, our forecast [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":34571,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-34570","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lower Testing Demand To Weigh On Abbott\u2019s Q2? | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Abbott (NYSE: ABT) will report its Q2 2023 results on Thursday, July 20. 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