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On Wednesday, Stifel financial firm updated its outlook on Abbott Laboratories (NYSE:ABT), increasing the price target from $125.00 to $130.00, while maintaining a Buy rating on the stock. The adjustment follows Abbott's earnings call where management projected continued robust growth for the company.
Abbott's CEO Robert Ford (NYSE:F) expressed confidence in the company's trajectory, anticipating high single-digit revenue growth and double-digit earnings growth as the company moves towards 2025. Ford described these expectations as "a very reasonable starting point," signaling a positive outlook for the company's financial performance.
The company's Medical Device segment, which accounts for approximately 45% of sales, is positioned for high-end growth, particularly with new products in the Diabetes Care and Structural Heart markets. This optimism is also reflected across Abbott's other business divisions. Despite one-time inventory adjustments that affected overseas pediatric growth, the Nutrition business, representing 19% of sales, grew 3.4% year-over-year. Faster growth in this segment is anticipated for the fourth quarter.
The Diagnostics division, which makes up about 23% of sales, continues to show strong fundamentals. Abbott highlighted double-digit Diagnostic underlying growth, excluding the challenges from China's Volume-Based Procurement (VBP) program. The Established Pharmaceuticals Division (EPD), accounting for 13% of sales, is expected to maintain high single-digit growth, with additional biosimilar launches planned for 2025.
In other recent news, Abbott Laboratories reported an impressive third-quarter performance, with over 8% organic sales growth and adjusted earnings per share of $1.21. The company has raised its guidance for the third time this year, attributing this positive adjustment to robust device sales. Diabetes Care sales surpassed $1.6 billion, marking a 21% increase, and a new $7 billion share repurchase program was authorized.
Despite facing challenges in international pediatric nutrition markets and Core Lab Diagnostics due to commercial execution issues and regulatory changes in China respectively, the company remains confident. The Libre product line in the Continuous Glucose Monitoring market saw a 21% overall growth and 26% in the U.S.
InvestingPro Insights
Abbott Laboratories' strong market position and financial performance are further underscored by recent data from InvestingPro. The company's market capitalization stands at an impressive $206.23 billion, reflecting its significant presence in the Healthcare Equipment & Supplies industry. Abbott's revenue for the last twelve months as of Q2 2024 reached $40.73 billion, with a quarterly revenue growth of 4.0% in Q2 2024, aligning with management's projections of continued robust growth.
InvestingPro Tips highlight Abbott's commitment to shareholder value, noting that the company has raised its dividend for 11 consecutive years and has maintained dividend payments for an impressive 54 consecutive years. This consistent dividend policy supports the company's appeal to income-focused investors. Additionally, Abbott's stock has shown a strong performance, with a one-year price total return of 28.41% as of the latest data.
These insights complement the article's discussion of Abbott's growth prospects across its various business segments. The company's solid financial foundation and market position provide context for management's confident outlook on future revenue and earnings growth. For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips on Abbott Laboratories, providing a deeper understanding of the company's financial health and market dynamics.
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