On Thursday, Citi reiterated its Buy rating on shares of Abbott Laboratories (NYSE:ABT), maintaining a price target of $128.00. The firm highlighted the company's strong first quarter performance, which showed a 10.8% increase in organic sales excluding COVID-19-related revenue, totaling $9.96 billion.
This figure surpassed the consensus estimate of $9.88 billion. Abbott's Medical Devices segment was particularly strong, with sales reaching $4.45 billion, up 14.3% year-over-year.
Despite the company beating quarterly expectations and raising the lower end of its full-year revenue and earnings per share (EPS) guidance, Abbott's stock experienced a decline. The updated guidance now forecasts organic revenue growth of 8.5% to 10%, up from the previous range of 8% to 10%. Additionally, EPS guidance was raised to $4.55 to $4.70, from the initial range of $4.50 to $4.70.
The firm's analyst pointed out that the contraction in operating margins to 19.7% from last year's 21.1% was partly due to a decrease in COVID-19 sales, which were $204 million compared to $730 million in the previous year. Nonetheless, the EPS of $0.98 exceeded the consensus estimate of $0.96. The analyst expressed a positive outlook on Abbott's performance, attributing the stock's unexpected reaction to broader market conditions and potential concerns over Nutrition litigation.
In summary, Citi remains positive on Abbott Labs, citing the company's first-quarter successes and management's confidence as reflected in the raised financial forecasts. The firm underscores the strength in Abbott's Medical Devices business and the overall robust performance despite external market factors and litigation concerns.
InvestingPro Insights
As Abbott Laboratories (NYSE:ABT) garners attention with its upbeat first-quarter results and optimistic guidance, insights from InvestingPro offer additional context for investors. With a market capitalization of $182.98 billion and a P/E ratio standing at 32.89, Abbott reflects a significant presence in the healthcare sector.
Notably, the company's commitment to shareholder returns is evident as it has raised its dividend for 54 consecutive years, a testament to its financial resilience and stability.
InvestingPro data reveals a slight revenue contraction of 2.84% over the last twelve months as of Q1 2024, yet the company has demonstrated a quarterly revenue growth of 2.23% in Q1 2024. This aligns with the strong sales performance highlighted by Citi. Moreover, Abbott's gross profit margin remains robust at 55.28%, underscoring efficient operations despite market fluctuations.
For investors seeking to delve deeper into Abbott's stock potential, two notable InvestingPro Tips are highlighted: Abbott's stock is currently in oversold territory according to the RSI, which could signal an upcoming rebound. Moreover, the stock generally trades with low price volatility, which might appeal to investors looking for stable equity in turbulent markets.
For further insights and tips, investors can explore InvestingPro, where 9 additional tips await. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment strategy with comprehensive data and analysis.
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