Company Overview and Recent Performance
With a market cap of $202.2 billion, Abbott Laboratories (ABT) is a major player in global healthcare, based in North Chicago, Illinois. The company specializes in a wide variety of healthcare products, divided into four key segments: Established Pharmaceuticals; Diagnostics; Nutritional Products; and Medical Devices.
Stock Performance Compared to the Market
Over the past 52 weeks, shares of Abbott have not kept pace with the broader market. While ABT stock has risen 24.5%, the S&P 500 Index ($SPX) has experienced a remarkable 36.1% rally. Year-to-date in 2024, ABT is up 6.3%, significantly trailing SPX’s 26% gain.
Examining the healthcare sector, ABT also lags behind the Health Care Select Sector SPDR Fund’s (XLV) 10% returns this year, though it has outperformed XLV’s 18.8% gain over the past year.
Strong Earnings and Future Guidance
On October 16, shares of Abbott rose 1.5% following strong Q3 earnings. The adjusted EPS of $1.21 exceeded forecasts and indicated a 6.1% increase from the previous year. Revenue reached $10.6 billion, showing a 4.9% year-over-year rise and surpassing analysts’ expectations. The Medical Devices segment led this growth with an impressive 11.7%. Products like FreeStyle Libre and Navitor contributed to double-digit gains in Diabetes Care, Structural Heart, and Electrophysiology.
Impressive earnings have bolstered management’s confidence, prompting an upward revision of full-year adjusted EPS guidance to $4.64-$4.74, along with a forecast for 9.5%-10% organic sales growth for 2024.
Analyst Consensus and Ratings
For the fiscal year ending in December, analysts project ABT’s EPS will grow 5.2% year-over-year, reaching $4.67. Abbott has consistently met or beat consensus estimates in the last four quarters, raising optimism among analysts. Among the 24 analysts covering the stock, the consensus rating stands at “Strong Buy,” featuring 16 “Strong Buy” ratings, two “Moderate Buys,” and six “Holds.”
Price Targets and Analysts’ Outlook
The bullish sentiment is evident in the recent rating adjustments. On November 4, Barclays analyst Matt Miksic increased Abbott’s price target to $149 while maintaining an “Overweight” rating. He predicts Abbott’s liability related to necrotizing enterocolitis could range from $1 billion to $3 billion, alongside an 11% earnings growth projection from 2024 to 2026, excluding COVID impacts.
As of this writing, ABT is trading below the average price target of $132.59, with the highest target of $149 suggesting a potential upside of 27.3%.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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