JPMorgan maintains Abbott Labs stock Overweight with $135 target

On Wednesday, JPMorgan analyst Robbie Marcus maintained an Overweight rating on Abbott Laboratories (NYSE:ABT) with a steady price target of $135.00. Marcus highlighted that Abbott’s first-quarter results for the fiscal year 2024, released before the market opened, surpassed Wall Street’s expectations in terms of organic sales growth and adjusted earnings per share (EPS). The healthcare giant, currently valued at $218.91 billion, maintains a strong financial position with an overall health score of "GREAT" according to InvestingPro analysis. The company’s management also confirmed its guidance for 2025, which anticipates 7.5-8.5% organic sales growth and an adjusted EPS range of $5.05 to $5.25, inclusive of tariff impacts.

Abbott Laboratories reported sales of $10.358 billion, a 4.0% increase as reported, and an 8.3% rise on an organic basis excluding COVID-19 testing revenue. This figure narrowly missed the reported sales forecast of $10.366 billion but slightly exceeded the organic ex-COVID expectations by approximately 20 basis points. Trading at a P/E ratio of 16.44, Abbott shows strong fundamentals with consistent revenue growth of 4.59% over the last twelve months. InvestingPro subscribers can access 10+ additional exclusive insights about Abbott’s valuation and growth metrics. The shortfall in reported sales was attributed to a $138 million decline in Diagnostics, while Devices, Nutrition, and Established Pharmaceuticals (EPD) segments outperformed expectations.

The company’s gross margin outperformed estimates by roughly 80 basis points, although operating expenses were about 40 basis points higher than anticipated. This resulted in an operating margin that beat expectations by approximately 30 basis points. The combination of in-line interest expenses and taxes led to an adjusted EPS that was $0.02 higher than predicted. With a robust gross profit margin of 55.56% and a strong dividend history spanning 55 consecutive years, Abbott demonstrates remarkable financial stability. The company currently offers a dividend yield of 1.87%, with a 7.27% dividend growth rate over the last twelve months. Despite the impact of tariffs, management has maintained its guidance, excluding COVID testing sales, for 7.5-8.5% organic sales growth, an operating margin between 23.5% and 24%, and an adjusted EPS of $5.05 to $5.25. Further details were expected to be discussed during the earnings call.

For the second quarter, Abbott projects an adjusted EPS of $1.23 to $1.27, which encompasses the consensus estimate. Marcus’s comments underscore the company’s ability to meet its financial targets while navigating the challenges posed by tariffs and the varying demand for COVID-19 testing products. According to InvestingPro’s comprehensive analysis, Abbott appears fairly valued at current levels, with analyst targets ranging from $111.34 to $158.00 per share. Investors seeking detailed insights can access Abbott’s full Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Abbott Laboratories reported a $43 million revenue shortfall, though this was partially offset by a $0.02 surplus in adjusted earnings per share. The company’s Medical (TASE:BLWV) Technology, Nutrition, and Pharmaceuticals divisions performed well, counterbalancing a significant shortfall in its Diagnostics business. Abbott’s Electrophysiology segment, part of its Medtech division, recorded $629 million in revenue, surpassing forecasts. Stifel analysts reiterated a Buy rating for Abbott, citing the positive reception of its Volt balloon-in-basket PFA system, which recently gained CE Mark approval in Europe. Similarly, TD Cowen maintained a Buy rating, highlighting Abbott’s new product rollouts like TriClip and Volt as key growth drivers. Oppenheimer also maintained an Outperform rating, noting Abbott’s strong position in the evolving pulse field ablation sector. Piper Sandler expressed confidence in Abbott’s structural heart business, predicting growth that exceeds their previous forecasts. These developments reflect a broad confidence among analysts in Abbott’s growth prospects across various healthcare segments.

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