On Thursday, Piper Sandler adjusted its outlook on Abbott Laboratories (NYSE:NYSE:ABT), increasing the price target to $133 from the previous $131 while maintaining an Overweight rating on the stock.
This change comes after Abbott reported third-quarter results that exceeded Wall Street's expectations for revenue and adjusted earnings per share (EPS), although its underlying top-line growth fell slightly short of forecasts.
Abbott's medical technology franchise demonstrated robust growth in the third quarter, which helped to balance weaker performance in the nutrition and diagnostics (Dx) segments.
For the fiscal year 2024, Abbott has confirmed its top-line growth forecast to be between 9.5% and 10.0%, excluding foreign exchange and COVID-19 impacts. Additionally, the company has nudged its adjusted EPS guidance upward by $0.01 at the midpoint, now anticipating $4.64 to $4.70.
The company's medical technology sector was notably strong, with key segments like diabetes care, structural heart, and electrophysiology outperforming expectations. Piper Sandler also noted that Abbott seems confident in meeting the 2025 consensus estimates for both revenue and earnings.
In other developments, Abbott expressed satisfaction with the recent consensus statement from the FDA, CDC, and NIH regarding infant nutrition. The company is optimistic that this evidence will be admissible in the multi-district litigation (MDL) expected next year.
In summary, Piper Sandler reiterated its Overweight rating on Abbott Laboratories, citing the company's diversified and undervalued large-cap medical technology portfolio as a key reason for the positive stance. The price target increase reflects confidence in the company's financial outlook and its ability to navigate ongoing legal matters.
In other recent news, Abbott Laboratories reported strong third-quarter earnings with revenues of $10.64 billion, surpassing market expectations. The company's GAAP earnings per share reached $0.94, in line with predictions from firms like Oppenheimer and TD Cowen.
Abbott's Medical Devices segment stood out, achieving revenues of $4.75 billion, marking a 13.3% organic growth. The company also raised its full-year EPS guidance for the third time this year, now forecasting between $4.64 and $4.70.
Analyst firms including TD Cowen, JPMorgan, Jefferies, and Stifel have all maintained or increased their price targets for Abbott, reflecting confidence in the company's growth prospects. CEO Robert Ford (NYSE:F) projects high single-digit revenue growth and double-digit earnings growth moving towards 2025, primarily driven by the Medical Device segment.
Abbott recently completed enrollment for its VOLT-AF study and anticipates an FDA filing in 2025. The company's cardiac mapping procedures have also seen significant progress, now mapping over 50% of radiofrequency ablation cases, a substantial increase from the previous 25-30%.
A new $7 billion share repurchase program was also authorized, demonstrating the company's confidence in its financial health and future prospects. These are among the recent developments at Abbott Laboratories.
InvestingPro Insights
Abbott Laboratories' strong performance and positive outlook are further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $205.29 billion, reflecting its significant presence in the healthcare equipment and supplies industry. Abbott's revenue for the last twelve months as of Q2 2024 reached $40.73 billion, with a modest growth of 1.24% over the same period.
InvestingPro Tips highlight Abbott's financial stability and shareholder-friendly policies. The company has maintained dividend payments for 54 consecutive years and has raised its dividend for 11 consecutive years, demonstrating a strong commitment to returning value to shareholders. This aligns well with the company's positive earnings outlook mentioned in the article.
Abbott's P/E ratio of 37.18 and its adjusted P/E ratio of 34.57 for the last twelve months as of Q2 2024 suggest that investors are willing to pay a premium for the stock, possibly due to its strong market position and growth prospects. This premium valuation is consistent with Piper Sandler's Overweight rating and increased price target.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips that could provide deeper insights into Abbott's financial health and market position.
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