On Thursday, Stifel reiterated its Buy rating on shares of Abbott Laboratories (NYSE:ABT), maintaining a $115.00 price target. The firm recognized Abbott's second quarter performance, which marked the sixth consecutive quarter of double-digit growth for its Medical Device division, constituting 43% of the quarter's sales. The division's growth is seen as a positive indicator for the MedTech industry.
Abbott reported second-quarter sales of $10.38 billion, a 9.3% increase year-over-year, aligning with the consensus and exceeding Stifel's projection of $10.29 billion. Earnings per share (EPS) reached $1.14, surpassing the $1.10 anticipated by both Stifel and the consensus. Following these results, Abbott has raised its full-year sales and EPS guidance to reflect the second quarter's performance.
The standout segments within the Medical Device division included Electrophysiology (EP), which saw a 16.7% growth, FreeStyle Libre, with a 20.4% increase, and Structural Heart, growing by 15.6%. During the 9am EST earnings call, Abbott is expected to delve into the factors contributing to these robust figures and to discuss what is driving the company's positive outlook for the second half of 2024.
Abbott also noted the resilience of its Electrophysiology division, particularly in the United States, where second-quarter growth accelerated to 17%. This was attributed in part to diagnostic and mapping growth, as the broader adoption of pulsed field ablation (PFA) technologies seems to benefit the sector. With competing PFA technologies anticipated to launch in the United States in the second half of 2024, the performance of the EP division remains a focal point for investors.
In summary, Abbott's consistent performance positions the company for sustained above-average growth in the latter half of 2024, indicating a stable outlook for the healthcare giant.
In other recent news, Abbott Laboratories reported solid Q2 results with revenues of $10.38 billion and earnings per share (EPS) of $1.14, slightly surpassing expectations. This robust performance led to an upward revision of the full-year outlook, with Abbott now anticipating organic sales growth, excluding Covid-related revenues, to be between 9.5% and 10.0%. The EPS forecast was also increased to a range of $4.61 to $4.71.
Analysts from Evercore ISI, TD Cowen, and Citi maintained positive ratings on Abbott, with price targets of $120.00, $130.00, and $119.00 respectively. Other firms, including BTIG and Goldman Sachs, have also issued Buy ratings.
In terms of product development, Abbott announced its 402nd consecutive quarterly dividend of 55 cents per share and received FDA clearance for two new over-the-counter continuous glucose monitoring systems, Lingo and Libre Rio. However, the company is currently facing a trial over allegations that its baby formula for preterm infants is linked to a dangerous bowel disease. These are the latest in a series of recent developments for Abbott Laboratories.
InvestingPro Insights
Following Stifel's reaffirmation of its Buy rating on Abbott Laboratories, a look at the company through the lens of InvestingPro data and tips provides additional context for investors. Abbott Laboratories boasts a significant market capitalization of $182.1 billion, underscoring its substantial presence in the healthcare industry.
With a P/E ratio of 31.11 for the last twelve months as of Q1 2024, the company trades at a high earnings multiple, suggesting investor confidence in its future earnings potential. Moreover, Abbott's low price volatility reflects its stability in the market, an attractive trait for risk-averse investors.
InvestingPro Tips highlight Abbott's decade-long track record of raising dividends, which aligns with its recent performance and optimistic guidance. Moreover, the company's ability to maintain dividend payments for an impressive 54 consecutive years provides a testament to its financial resilience and commitment to shareholder returns.
For investors seeking further insights, there are 6 additional InvestingPro Tips available, offering a comprehensive analysis of Abbott's financial health and market position. Interested readers can explore these insights and take advantage of a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Abbott's revenue growth of 2.23% in Q1 2024, coupled with a robust gross profit margin of 55.26%, reflects the company's efficient operations and profitability. These metrics, alongside the positive outlook shared by Stifel, reinforce investor confidence in Abbott's sustained growth and its strategic position within the MedTech industry.
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