1. Sang Hyuk Yoon | Tongsu (Serena) Peng
NYSE: ABT
Sang Hyuk Yoon | Tongsu (Serena) Peng
October 13, 2016

2. Team Introduction Tongsu (Serena) Peng Sang Hyuk Yoon Year: Senior
Graduation: May 2017
Major: B.S Accountancy & B.S Finance
Year: Senior
Graduation: December 2016
Major: B.S Accountancy & B.S Finance
Sang Hyuk Yoon

3. Agenda 4 6 9 12 14 15 23 Business Overview Industry Overview
Macroeconomics Overview
Transactions
Technical Analysis
Financial Analysis
Recommendation 4 6 9 12 14 15 23

4. Abbott Laboratories Overview
Company Overview
Business Overview
Diagnostics
23%
Pharmaceuticals
18%
Vascular
14%
Nutrition
34%
Other
11%
Founded
Founded in 1888
Location
Headquartered in Illinois
Sector
Healthcare
Industry
Medical Appliances & Equipment
Segments
Nutrition, Medical Devices, Diagnostics,
Pharmaceuticals
Customers
Retailers, Wholesalers, Hospitals, etc
Executive Leadership
Name
Title
Miles White
Chairman, CEO
Brian Yoor
CFO, Senior VP Finance
Thomas Freyman
Executive VP Finance & Administration
Stephen Fussell
Executive VP Human Resources
Michael Warmuth
Executive VP Pharmaceuticals
Statistics (as of 10/12/2016)
Market Cap
60.24B
Enterprise Value
64.98B
Shares Outstanding
1.47B
Dividend Yield
2.39%
*Data from K
*Data from Yahoo Finance.

5. Management Pharmaceuticals Diagnostics Nutrition Vascular
Focus on the sale of its products in emerging market
Sold its developed markets branded generics pharmaceuticals to Maylan
Spun off AbbVie, a research-based pharmaceutical firm
Introduce new products meeting market demand
Invest in its global infrastructure to expand its global presence
Formed a strategic alliance w/Fonterra, the world’s largest diary cooperative
Continue market penetration in U.S., China, and Latin America
Execute on efficiency initiatives in the manufacturing and supply chain
Acquired Alere, a global leader in point of care diagnostics
Continue to develop the worldwide marketing leading DES
Introduce vascular products to various markets
Conduct cost improvement initiatives to obtain a higher profit margin
*Data from K

6. . - Porter’s Five Forces *Moderate Threat of New Entrants Substitutes
Supplier
Bargaining
Power
Buyer
Rivalry
*High
*Low
*Moderate
Effect of
Compliments
Forces
Level
Factors
Threat of New Entrants
Low
High Capital Requirements Economies of Scale
Distribution Channel
Threat of Substitutes
High
Competing Brands
Generic Drugs
Therapies / Oriental Clinics
Supplier Bargaining Power
In-house Production
Overseas Production
Strategical Alliance
Buyer Bargaining Power
Moderate
Government Regulation
Mass Purchase (Hospitals, Retailers)
Individual Buyers
Rivalry
Fragmented Market
Merger & Acquisition
Marketing
Effect of Compliments
Regulation (Affordable Care Act)
Healthcare Provider
Medical Insurance Company

7. Industry Life Cycle Re-innovation Revival/Decline Introduction Growth
Maturity
Sales Volume
Time
FDA Approval
&
Patent
Marketing
Distribution
Patent Expiration
Modification

8. SWOT Analysis Strength Opportunity Weakness Threats Various Products
Patents Protection
Strong Brand Name
Steady Growth
Growing Dividends
Strength
Expansion to Global Market
Life Expectancy Growth
Global Population Growth
Merger & Acquisition
Biotechnology Boom
Opportunity
Spin-off of AbbVie
High R&D Expenses / Long R&D Time
Patent Expiration
Complex Manufacturing Process
Litigation
Weakness
Government Regulations
Generic Pharmaceutical Firms
Small Biotechnology Firms
Currency Exchange Rate
Intense Rivalry among competitors
Threats

9. Macroeconomic Overview
Population 65 and Above (% of Total)
Gross Domestic Product (in $ Trillion)
Health Expenditure per Capital:
*Data from World Bank. .
*Data from World Bank.

10. Macroeconomic Overview
Healthcare Expenditure per Capital
Life Expectancy
*Data from World Bank.
*Data from World Bank.

11. segment, which experience 39% YoY decrease
Recent News
Abbott’s M&A target ($25 billion)St. Jude Medical is facing a batter issue
Part of Diabetes Care
segment, which experience 39% YoY decrease
Sold for
$4.3 billion
*Data from Yahoo Finance.

12. Key Transactions Current Holdings (as of 2015/10/12)
Date
Acquired
Price ($)
Volume
(shares)
Current
Gain
($)
(%)
Weighted Average
Costs
Total Gain ($)
Total Gain
2011/04/28
24.97
200
40.98
3,202.00
64.12
26.72
5,705.00
53.38
2011/11/11
25.38
100
1,560.00
61.47
2012/12/10
31.55
943.00
29.89
Stock Price History (as of 2015/10/12)
Trailing P/E
27.05
Forward P/E
455.33
Beta
1.57
52-Week Change
-0.05%
S&P Week Change
6.64%
52 Week High
46.38
52 Week Low
36.00
50-Day Moving Average
42.16
200-Day Moving Average
41.39
Dividend Yield
1.04 (2.39%)
*Data from Yahoo Finance.

13. Insider Transactions (Q3 2016)
Date
Officer
Transaction Type
Price
Volume
2016/07/29
Thomas Freyman
Disposition
42,863
Option Execute
56,000
2016/07/28
Stephen Fussell
Sell
41,500
2016/07/26
Michael Warmuth
26,800
2016/07/25
Miles White
Buy
242,547
555,000
181,263
112,953
176,804
17,933
Robert Funck
(With White Miles)
Q3 2016
# of Shares Bought
1,437,600
# of Shares Sold
137,963
Net Activity
1,299,637
(Without White Miles)
Q3 2016
# of Shares Bought
151,100
# of Shares Sold
137,963
Net Activity
13,137
*Data from Yahoo Finance.

14. Technical Analysis

15. Ratio Analysis

16. Ratio Analysis Cont.

17. Comparable Companies Comparable Ticker Stock Price Description BDX
Becton Dickinson and Company
BDX
173.5
Develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Its BD Medical segment provides medical consumables, such as syringes and surgical sets and its Life Science segment provides blood analyzers and develops supplements for biopharmaceutical manufacturing.
Boston Scientific Corporation
BSX
23.2
Develops, manufactures, and markets medical devices for use in various interventional medical specialties worldwide. It operates through three segments: Cardiovascular, Rhythm Management, and MedSurg.
Medtronic plc
MDT
83.7
Manufactures and sells device-based medical therapies worldwide. It operates in four segments: Cardiac and Vascular Group, Minimally Invasive Therapies Group, Restorative Therapies Group, and Diabetes Group.
Baxter International Inc.
BAX 47
Provides a portfolio of renal and hospital products. Its Renal segment provides products and services to treat end-stage renal disease. Its Hospital Products segment manufactures intravenous (IV) solutions and other administration sets.
*Data from Capital IQ

18. Comparable Analysis
Implied Price:
$42.32

19. Revenue Growth Drivers
Internal Growth
GDP Growth
Inflation
Healthcare Industry Growth

20. Discount Rate
Discount Rate:
9.61%

21. DCF Model (fundamental)
Implied Price:
$40.94

22. Sensitivity Analysis Less Conservative = Higher Price
More Conservative
= Lower Price

23. Potential Opportunities:
Recommendation
DCF Valuation $
Potential Opportunities:
Expansion to Global Market
Life Expectancy Growth
Global Population Growth
Merger & Acquisition
Biotechnology Boom
Current Price $
Hold
Comparable Valuation $

24. Q & A