Abbott Laboratories Stock Falls 3% Following Narrowed Outlook

Abbott Laboratories (NYSE:ABT) increased its annual profit forecast on Thursday following a second-quarter performance that surpassed Wall Street expectations, driven by double-digit growth in glucose monitor sales and robust demand for heart devices.

Despite this, shares dropped more than 4% today as sales in the diagnostics and nutrition segments fell short of estimates. J.P. Morgan analysts noted that while the medical devices unit showed strength, concerns over the company's liability in infant formula cases persist.

The second quarter saw Abbott's medical devices sales rise by 10.2% to $4.73 billion, surpassing the estimated $4.66 billion. This growth was fueled by increased surgeries post-pandemic and higher demand for continuous glucose monitors like the FreeStyle Libre, whose sales jumped 18% to $1.6 billion. Abbott projects FreeStyle Libre sales to hit $10 billion by 2028.

However, the company's nutrition business, which includes infant and adult formula products, reported sales of $2.15 billion, slightly missing the forecasted $2.16 billion. Diagnostics sales, including COVID-19 tests, declined by 5% to $2.20 billion, against an estimate of $2.21 billion.

Abbott posted an adjusted quarterly profit per share of $1.14, exceeding the $1.10 expected by analysts. The company raised its full-year profit forecast to $4.61 to $4.71 per share, up from the previous range of $4.55 to $4.70.

David Roman of Goldman Sachs has recently set a bullish price target of $121 for Abbott Laboratories (NYSE:ABT), suggesting a potential upside of approximately 20.12% from its current price of $100.73. This optimistic outlook, as featured on StreetInsider, is based on a comprehensive analysis that underscores the company's strong market position and growth prospects. Abbott Laboratories, a leading name in the healthcare sector, is known for its diversified product portfolio, which spans across diagnostics, medical devices, nutritionals, and branded generic pharmaceuticals. This wide-ranging presence has enabled Abbott to establish a solid footing against competitors, making it a key player in the healthcare industry.

Despite a slight decline in its stock price by 0.27% to close at $103.95, Abbott Laboratories has been navigating through market fluctuations with a keen eye on future growth. This minor dip comes in contrast to the broader market's gains, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite experiencing increases. Over the past month, Abbott's shares have seen a 2.46% decrease, slightly underperforming against the Medical sector's 3.27% gain and the S&P 500's 4.03% increase. This performance indicates a cautious market sentiment towards Abbott amidst broader market dynamics.

The upcoming earnings announcement from Abbott is highly anticipated, with expectations set for the company to report earnings per share (EPS) of $1.10, marking a 1.85% improvement from the same quarter last year. Revenue forecasts suggest a 3.78% year-over-year increase, with projections estimating $10.35 billion for the quarter. These figures reflect the company's consistent growth trajectory and its ability to navigate through market challenges. For the full year, earnings are anticipated to be $4.62 per share, highlighting the company's strong financial health and operational efficiency.

Wall Street analysts, including those from Zacks Investment Research, have expressed a favorable outlook on Abbott, with an average brokerage recommendation (ABR) of 1.53, indicating a strong buy sentiment. This positive sentiment is supported by the analysis of 19 brokerage firms, with a significant majority rating the stock as a Strong Buy. This consensus among analysts underscores confidence in Abbott's growth prospects and its ability to deliver value to its shareholders.

Abbott Laboratories' robust financial performance, highlighted by an interest coverage ratio nearing 25 and an AA- credit rating from Standard & Poor's, further solidifies its position as a reliable investment. The company's strong sales growth during the first quarter and its solid base business have attracted increased investor interest. With a market capitalization of roughly $175.23 billion and a trading volume of about 4.96 million shares, Abbott continues to be a significant player in the healthcare industry, offering promising growth and stability to its investors.

Abbott (NYSE:ABT) adjusted its yearly profit projections after surpassing third-quarter earnings expectations, largely driven by heightened demand for its medical devices and diagnostics products. As a result, the company’s shares rose more than 2% pre-market today.

Abbott's Q3 earnings per share (EPS) stood at $1.14, which is $0.04 more than the predicted $1.10. The quarterly revenue reached $10.1 billion, compared to the Street estimate of $9.82 billion.

Robert Ford, Abbott's chairman and CEO, highlighted that their strategic investments during the pandemic are now fueling consistent growth throughout their primary business segments. The company remains on course to achieve its financial targets set earlier in the year, and the ongoing momentum across various portfolios sets a promising outlook for 2024.

For the full-year, Abbott anticipates an EPS ranging between $4.42 and $4.46, which is higher than the Street consensus of $4.18.

Abbott (NYSE:ABT) shares surged more than 7% today after the company reported its Q1 results, with EPS of $1.03 coming in better than the Street estimate of $0.99. Revenue dropped 18% year-over-year to $9.75 billion (vs. Street’s $9.66 billion) as diagnostics revenue fell 49% to $2.69 billion.

Abbott's Chairman and CEO, Robert Ford, announced that the company's first-quarter results indicate a strong start to the year, with accelerated growth in its core businesses, including Medical Devices, Established Pharmaceuticals, and Nutrition.

For the full 2023 year, the company expects EPS to be in the range of $4.30-$4.50, compared to the Street estimate of $4.39. The company also expects at least high single-digit organic sales growth for 2023.