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On Wednesday, Evercore ISI analysts adjusted their outlook on Abbott Laboratories (NYSE:ABT) stock, raising the price target from $138.00 to $140.00, while reiterating an Outperform rating. With the stock trading near its 52-week high of $141.23, analysts highlighted the company’s diversified business and ability to manage earnings per share (EPS) as key strengths in a market rife with uncertainty. According to InvestingPro data, Abbott maintains a "GREAT" financial health score, supported by strong fundamentals and market position as a prominent player in the Healthcare Equipment & Supplies industry.
The analysts praised Abbott Labs for its robust balance sheet and low net leverage, approximately 0.5 times, which they believe provides the company with additional financial flexibility. This assessment aligns with InvestingPro data showing a moderate Debt-to-Equity ratio of 0.32 and strong cash flows sufficient to cover interest payments. They noted that historically, Abbott has effectively capitalized on times of market disruption, demonstrated by its impressive track record of maintaining dividend payments for 55 consecutive years.
Abbott’s diversified business and the levers it has to manage EPS were emphasized as positive factors. The company’s management also pointed out that while foreign exchange rates have provided some aid, they have additional strategies in place to mitigate any future impacts.
The revised price target of $140.00 reflects a valuation of 27 times price-to-earnings (P/E), 21 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), and an approximate 3.6% free cash flow (FCF) yield. Current InvestingPro metrics show Abbott trading at a P/E of 17.32x with an EV/EBITDA of 21.14x, suggesting the stock is slightly overvalued compared to its Fair Value. This adjustment comes in the wake of Abbott’s continued performance and the potential for a settlement in the ongoing NEC litigation. For deeper insights into Abbott’s valuation and 10+ additional ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro.
Evercore ISI’s updated assessment underscores Abbott Labs’ position as a resilient player in the face of macroeconomic challenges, with strong growth drivers and the financial acumen to navigate through uncertain times.
In other recent news, Abbott Laboratories reported its first-quarter 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $1.09, compared to the forecasted $1.07. Despite a slight revenue miss, with sales reported at $10.36 billion against the projected $10.4 billion, the company’s gross margin expanded by 140 basis points to 57.1%. Abbott reaffirmed its full-year guidance, anticipating high single-digit organic sales growth and continued margin expansion. The company launched several innovative products, including the Vault PFA system for atrial fibrillation, and expects a second-half acceleration driven by new product launches. Abbott’s strategic focus on innovation and diversification was highlighted by CEO Robert Ford, emphasizing the company’s robust product pipeline. The company also addressed potential tariff impacts, estimating a few hundred million dollars in costs for 2025, while expressing confidence in its ability to manage these challenges. Analyst discussions during the earnings call focused on Abbott’s tariff mitigation strategies and manufacturing network flexibility.
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