Today we're going to take a look at the well-established Abbott Laboratories (NYSE:ABT). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. While good news for shareholders, the company has traded much higher in the past year. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Abbott Laboratories’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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What's The Opportunity In Abbott Laboratories?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 13% below our intrinsic value, which means if you buy Abbott Laboratories today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $145.14, then there’s not much of an upside to gain from mispricing. Furthermore, Abbott Laboratories’s low beta implies that the stock is less volatile than the wider market.

See our latest analysis for Abbott Laboratories

Can we expect growth from Abbott Laboratories?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Abbott Laboratories, at least in the near future.

What This Means For You

Are you a shareholder? ABT seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on ABT for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on ABT should the price fluctuate below its true value.

So while earnings quality is important, it's equally important to consider the risks facing Abbott Laboratories at this point in time. At Simply Wall St, we found 1 warning sign for Abbott Laboratories and we think they deserve your attention.

If you are no longer interested in Abbott Laboratories, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.