BTIG maintains Buy on Abbott stock with $140 target

On Wednesday, BTIG analysts maintained their Buy rating and $140.00 price target for Abbott Laboratories (NYSE:ABT) shares. The firm’s analysts highlighted the company’s performance, noting that Abbott’s adjusted earnings per share (EPS) exceeded expectations by two cents, despite a slight miss in sales. According to InvestingPro data, Abbott maintains a strong financial health score of 3.11 (rated as "GREAT"), with a notable track record of raising dividends for 11 consecutive years and maintaining payments for 55 years straight. Abbott reported first-quarter total revenue of $10.358 billion, a 6.9% increase organically year-over-year and a 4.0% increase on a reported basis, which was approximately $50 million below the consensus estimate of $10.407 billion. This performance contributes to Abbott’s impressive trailing twelve-month revenue of $41.95 billion, with a healthy gross profit margin of 55.56%. For investors seeking deeper insights, InvestingPro offers comprehensive analysis through its Pro Research Report, one of 1,400+ detailed company analyses available to subscribers.

The lighter-than-expected foreign exchange (Fx) headwinds were cited as a contributing factor to the results; Fx had a roughly 2.8% unfavorable impact on reported sales for the quarter compared to Abbott’s forecast of a 3.5% impact. Revenue performance varied by segment, with Medical (TASE:BLWV) Devices and Established Pharmaceuticals exceeding expectations, while Diagnostics lagged slightly. Medical Devices revenue was particularly strong, with a reported $4.895 billion in sales, marking a 12.6% year-over-year organic increase and a $26 million beat on expectations. This was partly driven by Continuous Glucose Monitors (CGMs) which recorded $1.7 billion in sales, up 21.6% organically year-over-year.

Diagnostics revenue, however, missed projections by $145 million, coming in at $2.054 billion, a 4.9% organic year-over-year decline, but showed a 0.5% increase after excluding COVID testing sales. Abbott noted that volume-based procurement in China impacted the growth of Diagnostics sales, which was anticipated to some extent. Analysts are looking for more details on this during the earnings call. Revenue from Established Pharmaceuticals grew by 7.8% organically year-over-year to $1.260 billion, exceeding expectations by $32 million, and Nutritional sales increased by 6.8% organically year-over-year to $2.146 billion, surpassing forecasts by $42 million.

Abbott’s adjusted EPS of $1.09 was at the top end of the guidance range and two cents higher than the consensus. The company’s gross margin improved by 140 basis points year-over-year to 57.1%, outperforming the consensus by 80 basis points. Operating margin also increased by 130 basis points year-over-year to 21.0%, exceeding consensus by 30 basis points. InvestingPro analysis reveals the company is trading at a P/E ratio of 16.44, relatively low compared to its near-term earnings growth potential, with strong cash flows sufficiently covering interest payments. The company’s moderate debt levels and stable beta of 0.8 further underscore its financial stability. Amidst the current uncertain macroeconomic environment, Abbott’s reaffirmation of its full-year guidance, including 7.5-8.5% organic sales growth, adjusted operating margins of 23.5-24.0%, and adjusted EPS of $5.05-$5.25, was particularly well-received.

For the second quarter, Abbott has set its adjusted EPS guidance to range from $1.23 to $1.27, which encompasses the consensus estimate of $1.25. Further details regarding expectations for adjusted gross margins, which were previously guided to 57%, as well as the outlook for foreign exchange impact, are anticipated during the earnings call scheduled for 9:00 am ET. With a market capitalization of $231 billion and analyst consensus indicating continued profitability, Abbott remains a prominent player in the Healthcare Equipment & Supplies industry. Discover more exclusive insights and 8 additional ProTips for Abbott through InvestingPro’s comprehensive research platform.

In other recent news, Abbott Laboratories reported first-quarter sales of $10.36 billion, marking a 6.9% year-over-year increase. The Medical Device division, a significant contributor, experienced a robust 12.6% growth, notably driven by the Diabetes segment’s 19.8% increase. However, the Diagnostics division saw a 4.9% decline, attributed to reduced Covid testing revenues and challenges in China. Abbott reaffirmed its full-year 2025 guidance, projecting organic revenue growth of 7.5%-8.5% and earnings per share (EPS) between $5.05 and $5.25. Analysts from Stifel and JPMorgan maintained a Buy and Overweight rating, respectively, both setting a price target of $135.00. Mizuho (NYSE:MFG) Securities maintained a Neutral stance with a $130.00 target, noting the company’s balanced performance despite a Diagnostics shortfall. Stifel also highlighted Abbott’s entry into the pulsed-field-ablation market with the Volt system, which recently received CE Mark approval in Europe. TD Cowen reiterated a Buy rating, emphasizing new product rollouts like TriClip and Volt as key growth drivers.

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