BTIG adjusted its outlook on Abbott Labs (NYSE: ABT), increasing the price target to $139 from $135 and sustaining a Buy rating on the stock. The firm's decision came after Abbott Labs reported a third-quarter revenue surpassing expectations by $91 million, credited mainly to strong performance in its Medical Devices segment.
The company's total revenue reached $10.635 billion, marking an 8.2% year-over-year organic growth excluding COVID-19 test sales. This figure also represented a 7.6% organic growth and a 4.9% reported growth year-over-year, outperforming the consensus of $10.544 billion.
The Medical Devices segment saw a significant 13.3% year-over-year organic growth, exceeding estimates by $81 million. Although COVID-19 test sales were not included in the original projections, they contributed to a higher than expected performance in the Diagnostics segment, with a $146 million beat over consensus when these sales were accounted for.
Abbott's adjusted earnings per share (EPS) of $1.21 beat forecasts by one cent, with gross margins aligning with expectations and operating expenses marginally above consensus. The company has updated its full-year guidance, now anticipating an adjusted EPS range of $4.64 to $4.70, with a GAAP EPS forecast of $3.34 to $3.40. For the fourth quarter, the adjusted EPS guidance of $1.31 to $1.37 aligns closely with the consensus estimate of $1.34.
The company's growth in the Devices sector outpaces most of its MedTech industry peers, with six out of seven Device business units performing above expectations. Notable growth drivers include the Electrophysiology division, the Lingo OTC CGM, and market share gains in Structural Heart products. Additionally, management has expressed confidence in achieving high single-digit revenue growth and approximately 10% EPS growth for 2025, which BTIG views as a reasonable starting point.
Abbott's CEO has also indicated a commitment to resolving infant formula litigation more swiftly than the typical lengthy process. BTIG's revised revenue forecast anticipates approximately 9.7% year-over-year organic sales growth for 2024, excluding COVID test sales. The firm expects potential for sales and adjusted EPS beats in the fourth quarter and possibly beyond, supported by sustainable growth in top Device franchises, new Device launches, improved margins, and a new $7 billion share repurchase authorization.
Rio Tinto (NYSE:RIO)'s third-quarter 2024 Pilbara iron ore shipments saw a minor year-over-year increase of 1%, despite operational challenges such as a highwall movement issue at its Kennecott site and forest fires causing site-wide shutdowns at the Iron Ore Company of Canada. CFRA maintained its Buy rating on Rio Tinto, adjusting its earnings per share forecasts for 2024 and 2025 due to these developments.
In the medical sector, Abbott Laboratories (NYSE:ABT) has raised its full-year profit outlook following strong third-quarter sales, primarily driven by its medical devices. Sales for the glucose monitors reached $1.6 billion, marking a near 21% increase from the previous year. Analyst firms Citi and JPMorgan (NYSE:JPM) maintained positive outlooks on Abbott, with the former focusing on the company's Pulse Field Ablation portfolio and the latter raising its price target for Abbott's shares in anticipation of strong third-quarter 2024 earnings.
InvestingPro Insights
Abbott Laboratories' strong performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $204.66 billion, reflecting its significant presence in the healthcare sector. 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 the article's mention of surpassing revenue expectations.
InvestingPro Tips reveal that Abbott has maintained dividend payments for 54 consecutive years and has raised its dividend for 11 consecutive years. This consistent dividend growth, coupled with a current dividend yield of 1.9%, underscores the company's financial stability and commitment to shareholder returns. The stock's 28.41% total return over the past year further supports the positive outlook presented in the article.
Additionally, InvestingPro highlights that Abbott is a prominent player in the Healthcare Equipment & Supplies industry, which aligns with the article's focus on the company's strong performance in the Medical Devices segment. The company's ability to generate cash flows that can sufficiently cover interest payments suggests a solid financial position, supporting its growth initiatives and market expansion efforts.
For readers interested in a deeper analysis, InvestingPro offers 12 additional tips for Abbott Laboratories, providing a comprehensive view of the company's financial health and market position.
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