QS Research · Michael Burry's Scion Capital analyst template · 2006
ABBOTT LABORATORIES (ABT)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -11% · upside +17%
At today's 20.6x EV/EBITDA (N28), TTM EBITDA of $10.56B (N14) and net debt of $26.86B (N24) give $190.39B equity, or $109.93 per share (N1, N5), so the base case is 0%. Flexing TTM EBITDA -10%/+15% at the same 20.6x gives $97.5 (-11.3%) and $128.9 (+17.3%), so the long rule is not met and the short rule is nowhere near met. The market is not missing a cheap asset: 40.5x P/E (N31) and a 3.5% FCF yield (N32) leave no margin of safety, while the debt-funded Exact Sciences deal and announced nutrition separation are real catalysts that have not yet proved they create value. I would watch, not own: the stock needs either an EBITDA run-rate above roughly $13.3B, about +26% from TTM, at today's multiple to make the base +30%, or a price low enough to create downside protection. Q3 2026 reported weakness is partly acquisition accounting and interest, but adjusted EPS guidance and Cancer Diagnostics growth still have to survive scrutiny.
Key numbers
- Share price: $109.93
- Market cap: $190.39B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $48.23B
- EV / EBITDA (TTM): 20.6x
- P/E (TTM): 40.5x
- Price / book: 3.73x
The 15 boxes
- ✓ 1. Long-form business notes
Abbott is a four-segment healthcare manufacturer — Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Medical Devices — selling branded generics outside the U.S., lab and point-of-care diagnostics, infant/adult nutrition, and cardiovascular, CGM and neuromodulation devices. Revenue went $34.61B (FY2020) to $44.33B (FY2025), with only one down year in the window ($40.11B in FY2023 versus $43.65B in FY2022). Operating income of $8.05B in FY2025 is the earnings base to use; FY2024's $13.40B net income to common exceeded that year's $7.01B pre-tax income, so it was not an operating result and the source does not identify what drove it. Between the oldest and newest 10-K the biggest changes are portfolio (leadless pacemakers, pulsed-field ablation, Lingo CGM, biosimilars) and a Nov 19, 2025 agreement to acquire Exact Sciences to enter cancer diagnostics.
- ○ 2. Competitive advantage
The sources show a real but bounded advantage: FY2025 operating income of $8.05B on $44.33B of revenue (18.2%, computed from S27) is up from 16.2% in FY2023 but still below the 19.6% FY2021 peak, and operating cash flow of $9.57B against $2.17B of capex has never fallen below $7.26B in FY2020-FY2025. The moat the filings actually describe is legal and regulatory rather than commercial - patent/trademark protection, costly FDA-type approvals, and 'entrenched patterns of clinical practice' - against 'intense competition', government cost containment and 'downward pressure on certain product pricing'. A meaningful share of the earnings base is bought: amortization of intangibles was $1.68B in FY2025, and Abbott plans ~$20B of borrowings for the Exact Sciences acquisition on top of $12.9B of debt at 2025-12-31. FY2024 net income to common ($13.40B) exceeds that year's pre-tax income ($7.01B) and must not be used as evidence of operating profitability.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended Sep 30, 2026) sales were $13,013M versus $11,369M in Q3 2025, up 14.5% reported and 7.0% comparable per the earnings release; nine-month sales were $36,770M versus $32,869M, up 11.9% reported and 5.2% comparable. Growth is heavily acquisition-driven: Exact Sciences (closed March 23, 2026) put Cancer Diagnostics at $968M in Q3 2026 and $2.0B of sales into the first nine months. Reported profit fell — operating earnings $1,358M versus $2,057M and GAAP diluted EPS $0.53 versus $0.94 — on higher SG&A ($4,266M vs $3,051M), amortization ($841M vs $420M) and interest expense ($350M vs $121M), while the release's adjusted diluted EPS was $1.42. Cash fell to $4,052M from $8,522M at Dec 31, 2025 as $20,083M went into acquisitions funded by $19,829M of new long-term debt; open-market buybacks essentially stopped in Q3 2026 (685 shares purchased versus 2,425,492 in Q3 2025). Guidance was numeric and reaffirmed: ~6.0% FY2026 comparable sales growth and adjusted diluted EPS of $5.50 to $5.55.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.