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On Thursday, Bernstein SocGen Group adjusted their outlook on Abbott Laboratories (NYSE:ABT), increasing the price target from $138 to $144 while maintaining an Outperform rating on the company’s shares. According to InvestingPro data, Abbott, with its $228 billion market cap, maintains a "GREAT" financial health score of 3.08, demonstrating strong fundamentals in the Healthcare Equipment & Supplies sector. Analyst Lee Hambright highlighted the company’s solid performance, noting an impressive 8.3% organic sales growth, excluding COVID-19 testing revenue, amidst a challenging macroeconomic environment. This growth was spearheaded by a remarkable 13% organic increase in the Medical (TASE:BLWV) Devices segment, which includes a 30% surge in U.S. Continuous Glucose Monitoring (CGM) sales.
Hambright emphasized the company’s resilience, citing improved margins with gross margin (GM) up by 140 basis points and operating margin (OM) by 130 basis points. Adjusted earnings per share (EPS) saw an 11.2% rise to $1.09, surpassing consensus estimates by 2%. The company’s stability is further evidenced by its low beta of 0.8 and impressive 55-year streak of maintaining dividend payments, with a current yield of 1.82%. The analyst’s positive outlook is further supported by Abbott’s ability to maintain its guidance despite facing an incremental $350 million impact from tariffs.
The new price target is based on a target price-to-earnings (P/E) multiple of 24.5 times, a slight increase from the previous 24.0 times. This adjustment reflects confidence in the company’s forward Q5-Q8 EPS estimate, which has been revised upwards from $5.76 to $5.86. Hambright’s comments suggest that Abbott Labs is expected to remain stable even during market downturns, positioning the company favorably against current macro pressures.
Abbott Laboratories’ financial resilience and growth in the Medical Devices sector, particularly in the U.S. CGM market, have been significant factors contributing to the analyst’s optimistic assessment. With continued margin improvements and earnings growth, Abbott Labs is perceived as well-equipped to navigate through the prevailing economic challenges. Trading at a P/E ratio of 17.17x, the stock is currently fairly valued according to InvestingPro’s Fair Value model. Investors seeking deeper insights can access 12 additional ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports.
In other recent news, Abbott Laboratories reported first-quarter earnings with revenue reaching $10.36 billion and earnings per share (EPS) of $1.09. Although the revenue slightly missed the estimates of $10.41 billion, the EPS exceeded forecasts of $1.07. The company’s Medical Devices segment showed impressive growth with a 12.6% increase, while Diabetes Care saw a 21.6% rise in sales. Despite a shortfall in the Diagnostics division due to challenges in China, Abbott maintained its 2025 financial guidance, projecting EPS between $5.05 and $5.25.
Several financial firms have adjusted their price targets for Abbott. TD Cowen, RBC Capital, and Piper Sandler raised their targets to $145, while UBS maintained a target of $148. In contrast, Stifel lowered its target to $135 but kept a Buy rating. Analysts from these firms expressed confidence in Abbott’s ability to manage tariff impacts and sustain growth.
Abbott’s strategic initiatives in its MedTech segment and proactive management of external challenges were highlighted by UBS and Piper Sandler. The company’s reaffirmed guidance and robust performance in core segments continue to reassure investors about its operational strength and future prospects.
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