🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UBS maintains Buy on Abbott Labs stock

EditorAhmed Abdulazez Abdulkadir
Published 07/19/2024, 09:20 AM
ABT
-

On Friday, UBS reaffirmed its Buy rating on Abbott Laboratories (NYSE:ABT), maintaining a price target of $143.00 per share. The firm's analysis highlighted that Abbott's shares declined despite delivering another quarter of robust, broad-based performance.

According to UBS, the results should have been positively received by investors, but foreign exchange (FX) headwinds, which were more severe than expected, contributed to the stock's underperformance.

The firm also noted that legal issues concerning the ongoing nutrition business trial have caused investors to remain cautious, impacting the stock's movement. The analyst expressed the belief that the trial's outcomes are eagerly awaited for clarity, which is currently affecting investor sentiment.

UBS emphasized the continued strength in Abbott's Medical Device sector, pointing out that the company has been successfully increasing its presence in higher growth end markets. This, combined with the expansion of operating leverage, is expected to support accelerated bottom-line growth in the near term.

Despite the year-to-date decline in Abbott's stock price, UBS suggests that the company is trading at a significant discount compared to similar large-cap "growth" stocks. The firm's stance indicates confidence in Abbott's sales growth potential and its ability to outperform amidst market headwinds.

The financial institution's commentary underscores the contrast between the company's solid quarterly results and the stock's performance, which has been influenced by external factors beyond its fundamental business strengths.

In other recent news, Abbott Laboratories reported robust second-quarter earnings and revenue results, with earnings per share (EPS) of $1.14 surpassing expectations. The company's revenues of $10.38 billion were primarily driven by the Medical Devices segment, which exceeded expectations. Abbott's full-year revenue guidance has been updated to an organic growth range of 9.5%-10%, and its EPS guidance has been raised to $4.61-$4.71 from the previous $4.55-$4.70 range.

Analysts from Evercore ISI, Citi, and TD Cowen have maintained positive outlooks on Abbott, with Evercore ISI and Citi reiterating Outperform and Buy ratings, respectively. TD Cowen also maintained its Buy rating, citing expectations of strong second-quarter results.

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, Abbott is currently facing a trial over allegations that its baby formula for preterm infants is linked to a dangerous bowel disease.

InvestingPro Insights

In light of UBS's optimistic stance on Abbott Laboratories, a look at real-time data from InvestingPro provides additional context for investors. Abbott's commitment to shareholder returns is evidenced by its history of raising dividends, now for 54 consecutive years, suggestive of a stable financial foundation. Moreover, the company's stock trades with low price volatility, offering a degree of predictability in an otherwise turbulent market.

InvestingPro Data metrics reveal that Abbott Laboratories has a market capitalization of $174.09 billion and a trailing P/E ratio of 29.74 as of Q1 2024. While the company's revenue saw a slight decline of 2.84% over the last twelve months as of Q1 2024, the quarterly revenue growth during Q1 2024 was positive at 2.23%. Additionally, the gross profit margin remains strong at 55.26%, underscoring the company's ability to maintain profitability.

For those considering further research on Abbott Laboratories, there are an additional 7 InvestingPro Tips available, which can provide deeper insights into the company's financial health and market position. Interested investors can 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. This offer can enrich your investment strategy with comprehensive analysis and data-driven insights.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.