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ABT – Market expectations are for record-high Uniform ROA, but management’s concerns about FX tailwinds and their Alinity systems imply this may be unwarranted
October 30, 2017
Abbott Laboratories (ABT:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 27.3x Uniform P/E, implying bullish expectations for the firm. However, given management’s concerns about FX tailwinds and their Alinity systems, this may be unwarranted
Specifically, management appears concerned about the sustainability of FX tailwinds, and the potential of their European Alinity systems launch. Should the firm fail to drive Uniform Margins back to pre-spinoff levels, as management sentiment suggests, multiple compression and equity downside would be warranted