On Thursday, Goldman Sachs (NYSE:GS) initiated coverage on shares of Abbott Laboratories (NYSE:ABT), issuing a Buy rating and setting a price target of $121.00. The firm's positive outlook on the stock is based on several key factors that are expected to contribute to the company's growth.
The firm believes that Abbott Labs is positioned to achieve sustained high-single-digit growth in its top-line revenue. This optimism is partly due to the company's ability to launch new products and capitalize on market growth within its Medical Devices segment. The expectation is that these factors will help maintain momentum as the growth of the company's Libre product starts to mature.
Additionally, Goldman Sachs forecasts that Abbott Labs will see margin expansion beginning in 2025. This expansion is anticipated to result from increased revenue and the resolution of certain discrete headwinds. One such headwind mentioned is the Nutrition remediation, which is expected to become less of a factor moving forward.
The coverage by Goldman Sachs reflects confidence in Abbott Labs' potential for financial performance and market position. With the new product launches and market growth in the Medical Devices sector, the firm anticipates that Abbott Labs will continue to build on its current successes.
The price target of $121.00 represents Goldman Sachs' expectation for the future value of Abbott Labs' shares, based on the company's growth prospects and strategic initiatives.
InvestingPro Insights
As Goldman Sachs initiates coverage on Abbott Laboratories with a Buy rating and a price target of $121, InvestingPro data and tips offer additional insights into the company's financial health and stock behavior. Abbott Laboratories currently holds a market capitalization of $175.23 billion, reflecting its significant presence in the healthcare sector. With a P/E ratio of 31.32 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at 29.94, the company trades at a high earnings multiple, which is a point to consider for investors looking at the value aspect of the stock.
InvestingPro Tips highlight that Abbott has a history of raising its dividend, doing so for 54 consecutive years, and the stock's RSI suggests it is in oversold territory, which might interest investors looking for potential entry points. Additionally, the company's cash flows are robust enough to sufficiently cover its interest payments, indicating financial stability. For those interested in dividend income, the current dividend yield stands at 2.18%, with a dividend growth of 7.84% over the last twelve months as of Q1 2024.
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