...

Abbott Laboratories (ABT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Abbott Laboratories (ABT)

View Full Profile →

Intrinsic Value (DCF)

Current$124.64
→
Intrinsic$134.73
+8%
$88.66$134.73$226.26
Market implies 23% growth for 5 years
ABT appears fairly valued — current price aligns with our DCF estimate.
At $125, the market prices in continued strong cash flow growth (23%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $89 → Bull $226. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$172$186$202$218
10%$115$125$135$145
12%$85$92$100$107
14%$67$72$78$84

Bull Case

  • Bull case ($226) offers 82% upside at 30% growth, 8% discount
  • 7% margin of safety vs. base case estimate
  • Market-implied growth (23%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($89) implies 29% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
Loading charts...

5-Year Free Cash Flow Projection

Year 1$7.94B
Year 2$9.92B
Year 3$12.40B
Year 4$15.51B
Year 5$19.38B
Terminal$307.13B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$6.35BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare ABT vs AAPLStock Screener

Frequently Asked Questions

Is ABT stock undervalued or overvalued?
🔴 OVERVALUED

ABT trades at $124.64 vs. our DCF-derived intrinsic value of $90.27, implying -29% downside. Using a 9.5% WACC and 25.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($136.03) suggests limited upside.

What is ABT's intrinsic value?

Using a 5-year DCF model: Base FCF of $6.35B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.66B net debt and dividing by 1.75B shares: Bear $59.05 | Base $90.27 | Bull $136.03. Current price $124.64 implies -29% to base case.

How is ABT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($165.46B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.