Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 24 Sept 2026
ABT· Healthcare
Abbott Laboratories
Abbott Laboratories has strong financial health, but its valuation is stretched with a P/E of 26.9 and modest growth.
Buffett fit
Weak fit
Owner
48
Durability
41
Management
63
Price
33
Score updated 29 Oct 2026 · analysis from 24 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of Abbott, we'd focus on maintaining its strong financial health, indicated by a current ratio of 1.58 and net debt/EBITDA of 0.44.
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Abbott's durable business model is supported by consistent profitability over the past five years.
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Abbott's management shows discipline with a share count CAGR of -0.28% and a yield of 1.27%, suggesting shareholder-friendly policies.
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At a of 26.9 and an yield of 4.22%, Abbott is priced for growth that its recent performance doesn't support.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Net margin of 14.72% is top-quintile in the healthcare sector.
- 2 of 18.17% exceeds the sector's top-quintile cutoff of 16.2%.
- 3Interest coverage ratio of 18.2 indicates strong ability to service debt.
- 4Debt/Equity ratio of 0.27 shows conservative .
Concerns
6- 1 of 26.9 is high, pricing in growth not reflected in recent EPS trends.
- 25-year EPS CAGR of -1.73% signals earnings contraction.
- 3 of 56.42% is below the sector's top-quintile cutoff of 77.9%.
- 4 of 11.22% is below the 15% Buffett threshold for a wonderful business.
Price history
$105-15.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Abbott Laboratories operates in four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. The company generates $44.33B in revenue with a net margin of 14.72%, indicating strong profitability. at 56.42% are below sector top-quintile, but of 18.17% are top-quintile, suggesting efficient operations. The unit economics show a robust /Net income ratio of 1.13, indicating high earnings quality.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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