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Abbott share maintains Buy rating on FDA clearance

EditorNatashya Angelica
Published 03/06/2024, 16:10

On Monday, BTIG confirmed its Buy rating and $135.00 stock price target for Abbott Laboratories (NYSE:ABT) following news that the company's Lingo Glucose Tracking System received clearance from the FDA.

The system, which is designed for non-intensive monitoring, is now authorized for over-the-counter sales. Abbott Laboratories had anticipated clearance within this year and intends to launch the product with a direct-to-consumer, cash-pay model, eliminating the need for a prescription.

The Lingo Glucose Tracking System's approval positions Abbott to enter the competitive over-the-counter market, where it will face off against rivals like Dexcom (NASDAQ:DXCM). Dexcom is expected to introduce its Stelo Continuous Glucose Monitoring (CGM) system in the United States during the summer. The FDA's 510(k) database update was the source of the clearance information, although Abbott has not yet made an official statement.

BTIG's analyst noted the significance of the FDA clearance for Abbott's market presence and its ability to compete in the growing sector of glucose monitoring. The direct-to-consumer approach that Abbott plans to adopt could broaden its customer base by simplifying access to glucose monitoring technology for those who need it.

Despite the development, BTIG has not made any adjustments to its financial model or estimates for Abbott Laboratories, indicating confidence in the company's trajectory. The firm awaits further details from Abbott regarding the launch and marketing strategy for the Lingo Glucose Tracking System.

In conclusion, BTIG's reiteration of the Buy rating reflects a positive outlook on Abbott's market strategy and the potential impact of its newly cleared Lingo Glucose Tracking System. The firm's stock price target remains unchanged at $135.00 as it monitors Abbott's progress in the over-the-counter glucose monitoring space.

InvestingPro Insights

As Abbott Laboratories (NYSE:ABT) gears up to enter the over-the-counter glucose monitoring market with its Lingo Glucose Tracking System, investors are closely monitoring the company's financial health and market position.

According to InvestingPro data, Abbott has a market capitalization of $178.64 billion and a P/E ratio of 31.98, reflecting a premium valuation. The company's revenue for the last twelve months as of Q1 2024 stands at $40.33 billion, with a slight decline in revenue growth at -2.84%. Despite this, the firm's gross profit margin remains strong at 55.26%, showcasing its ability to maintain profitability.

InvestingPro Tips highlight that Abbott Laboratories has been a consistent performer with a track record of raising its dividend for 54 consecutive years, which could be attractive to income-focused investors. Moreover, the company's low price volatility and status as a prominent player in the Healthcare Equipment & Supplies industry may offer a sense of stability amidst market fluctuations. For those looking deeper into Abbott's financials and market prospects, more InvestingPro Tips are available at https://www.investing.com/pro/ABT. Interested investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to an extended list of 10 additional InvestingPro Tips.

The current financial metrics and strategic moves by Abbott, as reported by BTIG, underscore the company's potential to leverage the FDA clearance of its Lingo Glucose Tracking System to expand its consumer reach. The InvestingPro data and tips provide a broader financial context, which complements the analysis of Abbott's market strategy and future growth prospects.

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

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