Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Thursday, UBS expressed continued confidence in Abbott Laboratories (NYSE:ABT), maintaining a Buy rating and a price target of $148.00. The firm’s stance is supported by Abbott’s first-quarter results for the year 2025, which showcased robust growth in its MedTech segment. The company’s organic MedTech sales growth reached 12.6% in the first quarter, surpassing the consensus estimate of 10.9%. This performance contributed to an overall organic sales growth of 6.9%, or 8.3% when excluding COVID diagnostics. The strong performance aligns with Abbott’s track record, as InvestingPro data shows the company has achieved a 6% revenue CAGR over the past five years and maintains a "GREAT" overall financial health score.
The UBS analyst highlighted that Abbott’s management effectively addressed concerns related to the impact of tariffs, reassuring investors by reiterating the earnings per share (EPS) guidance for 2025 despite a minor hit from tariffs in the first half of the year. Although the situation with tariffs remains dynamic and could potentially affect earnings in 2026 or even later in 2025, Abbott is actively pursuing initiatives to mitigate these risks. According to InvestingPro, Abbott operates with moderate debt levels and strong cash flows sufficient to cover interest payments, providing financial flexibility to navigate challenges. The company’s robust financial position is further evidenced by its impressive 55-year streak of maintaining dividend payments.
The analyst noted that the fluidity of the tariff situation could introduce additional downside risks to future earnings. However, the strength of Abbott’s MedTech business is expected to continue driving growth, which could help to counterbalance any negative effects from tariffs that exceed current expectations. Abbott’s proactive approach to managing these challenges was acknowledged, suggesting a strategic focus on maintaining momentum in the face of external pressures.
Abbott’s first-quarter performance and its handling of tariffs have been well-received, indicating a positive outlook for the company’s financial health. UBS’s reaffirmed rating and price target reflect an anticipation of sustained growth and the potential for Abbott’s strategic initiatives to mitigate any further tariff-related impacts.
In other recent news, Abbott Laboratories has reported its first-quarter earnings, showcasing a notable performance despite some challenges. The company achieved a 6.9% organic increase in revenue year-over-year, with total sales reaching $10.36 billion. Abbott’s earnings per share (EPS) came in at $1.09, surpassing several analysts’ expectations, including those from Stifel, which had projected $1.07. The Medical (TASE:BLWV) Devices division was a standout, recording a 12.6% growth, with significant contributions from Diabetes care and Structural Heart segments.
Abbott has reaffirmed its full-year 2025 guidance, projecting organic revenue growth between 7.5% and 8.5% and an adjusted EPS in the range of $5.05 to $5.25. Analysts have responded with mixed adjustments to their price targets. Piper Sandler raised its target to $145, while maintaining an Overweight rating, highlighting Abbott’s strong performance in the medtech sector. In contrast, Stifel reduced its target to $135 but kept a Buy rating, noting the company’s resilience amid macroeconomic challenges.
Oppenheimer increased its price target to $140, maintaining an Outperform rating, citing solid performance in Medical Devices and future growth prospects. Raymond (NSE:RYMD) James also raised its target to $142, highlighting Abbott’s consistent execution and ability to navigate tariff expenses. Meanwhile, BTIG adjusted its target upward to $145, emphasizing the company’s strategies to mitigate tariff impacts and its strong start to the year. These recent developments reflect a positive outlook from analysts on Abbott’s strategic positioning and growth potential.
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