On Thursday, Citi reaffirmed its Buy rating on shares of Abbott Laboratories (NYSE:ABT), maintaining a price target of $119.00. Abbott reported second-quarter 2024 revenues of $10.38 billion, a 4.0% increase on a reported basis and a 9.3% rise organically excluding Covid-19 impacts.
These figures aligned closely with the consensus estimate of $10.37 billion. The company experienced growth across various segments, with Nutrition up 7.5% at $2.15 billion, Diagnostics down 5.3% but up 5.9% excluding Covid-19 at $2.20 billion, Established Pharmaceuticals (EPD) up 8.1% at $1.29 billion, and Medical Devices increasing by 12.1% to $4.73 billion.
Abbott's operating margins improved slightly to 21.9% from 21.7% year-over-year, despite Covid-related sales dropping to $102 million from $267 million the previous year. The earnings per share (EPS) reached $1.14, a 5.8% increase, surpassing the consensus expectation of $1.11.
Management has also adjusted its forecast, raising the lower end of its organic sales growth excluding Covid-19 to a range of 9.5%-10.0%, up from the previous 8.5%-10.0%. Additionally, the EPS guidance was increased to $4.61-$4.71, up from the earlier range of $4.55-$4.70.
The company's robust high single-digit growth excluding Covid-19, particularly the double-digit increase in the Medical Devices segment, suggests a strong quarter. However, the firm anticipates that ongoing litigation related to infant formula could temporarily affect the stock's performance. Despite this, Citi has reiterated its positive stance on Abbott Laboratories, highlighting the company's consistent delivery of high single-digit revenue growth.
In other recent news, Abbott Laboratories has revised its profit outlook for the year, following robust sales in its medical device segment which led to a quarterly profit of $1.14 per share, surpassing the average analyst estimate.
The healthcare company now projects a full-year profit ranging from $4.61 to $4.71 per share. This upward revision reflects a positive trend in the medical device industry where Abbott has been experiencing strong sales.
Simultaneously, Abbott is facing a trial over allegations that its baby formula for preterm infants is linked to a dangerous bowel disease. This litigation is separate from other ongoing legal issues Abbott is addressing, including the 2022 shutdown of its Sturgis, Michigan, plant and a baby formula recall.
TD Cowen has reaffirmed its confidence in Abbott Laboratories, maintaining a Buy rating and a $130.00 price target for the company's stock. The firm's outlook is based on expectations that Abbott will deliver strong second-quarter results. This sentiment has been echoed by other firms, including BTIG, Goldman Sachs (NYSE:GS), and Citi, who have also issued Buy ratings.
In terms of product development, Abbott has announced its 402nd consecutive quarterly dividend of 55 cents per share. The company has also expanded its product portfolio with the FDA clearance of two new over-the-counter continuous glucose monitoring systems, Lingo and Libre Rio.
InvestingPro Insights
As Citi maintains a bullish outlook on Abbott Laboratories (NYSE:ABT), InvestingPro data and tips add further context to the company's financial health and market position. Abbott Laboratories boasts a solid market capitalization of $182.1 billion, reflecting its significant presence in the healthcare industry. The company's price-to-earnings (P/E) ratio stands at 31.9, which is indicative of the high earnings multiple noted by InvestingPro Tips. Despite a slight decline in revenue growth over the last twelve months, down by 2.84%, Abbott's gross profit margin remains strong at 55.26%, illustrating the company's ability to maintain profitability.
InvestingPro Tips further highlight that Abbott has successfully raised its dividend for 10 consecutive years, showcasing a commitment to returning value to shareholders. Additionally, the stock is known for its low price volatility, providing a potentially more stable investment option within the volatile healthcare sector. With 7 more tips available on InvestingPro, investors can further explore Abbott's financial nuances. Interested readers can leverage the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, gaining access to comprehensive analysis and insights that could guide their investment decisions.
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