QS Research · Michael Burry's Scion Capital analyst template · 2006
ABBOTT LABORATORIES (ABT)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -20% · downside -37% · upside +15%
The market is paying 26.4x TTM EBITDA and 40.5x GAAP P/E for a business with $6.76B TTM FCF, a 3.5% FCF yield and GAAP EPS depressed by Exact Sciences amortization; adjusted EPS guidance of $5.50-$5.55 is the better operating lens, but even that leaves the stock near 20x adjusted earnings, not a deep-value price. On the section 13 TTM base ($8.21B EBITDA, $28.07B net debt, 1.73194B shares), a 22x EV/EBITDA base case gives about $88/share (-19.9%), 18x downside about $69 (-37.1%) and 30x upside about $126 (+14.6%). Cash generation and the nutrition-spin/Exact Sciences catalysts could improve mix, but the balance sheet now carries about $31.2B of debt and the risk/reward meets neither the long nor the short rule. This is a watch, not a buy: wait for a lower multiple or evidence that EBITDA/FCF power is materially above TTM.
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): 26.4x
- P/E (TTM): 40.5x
- Price / book: 3.73x
The 15 boxes
- ✓ 1. Long-form business notes
ABBOTT makes money through four reportable segments — Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices — selling to wholesalers, hospitals, laboratories, consumers and governments. FY2025 revenue was $44.33B, operating income $8.05B, operating cash flow $9.57B and capex $2.17B. The portfolio shifted toward medical devices/CGM, diagnostics and biosimilars between FY2020 and FY2025, and on 2025-11-19 Abbott agreed to acquire Exact Sciences to enter cancer diagnostics. The sources provide no segment-level revenue, profit or unit economics.
- ○ 2. Competitive advantage
Abbott shows scale and cash generation ($44.33B FY2025 revenue, $8.05B operating income, $9.57B operating cash flow), but the sources do not establish a durable moat: operating margins are mid-to-high teens and variable, competition is described as intense, and patents/regulatory approvals are necessary but vulnerable. The FY2024 net income spike is not an operating profit signal. Specific competitors and market shares are not named.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) sales rose to $13,013M from $11,369M a year earlier, with $968M of the quarter coming from the newly created Cancer Diagnostics line after the Exact Sciences deal closed 2026-03-23 for ~$20.6B. The top line grew but operating earnings fell to $1,358M from $2,057M and diluted EPS to $0.53 from $0.94, because acquired-intangible amortization rose to $841M from $420M and SG&A to $4,266M from $3,051M. Nine months 2026: sales $36,770M, operating earnings $4,396M, net earnings $2,925M, operating cash flow $5,540M versus $6,251M in the first nine months of 2025. Funding the deal pushed long-term debt to $29,451M from $9,896M and cut cash to $4,052M from $8,522M.
- ✓ 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
- ○ 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.
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