On Wednesday, Jefferies, a global investment banking firm, revised the price target for shares of Abbott Laboratories (NYSE:ABT), increasing it to $125 from the previous $120, while maintaining a Hold rating on the stock. This adjustment followed the company's report of third-quarter sales that slightly surpassed consensus estimates.
Abbott Laboratories announced third-quarter 2024 sales of $10.6 billion, which modestly exceeded the consensus projections of $10.55 billion. The company's sales were primarily boosted by strong performance in its Medical Technology division and revenue from COVID-19 tests. However, this was somewhat counterbalanced by weaker results in international nutrition due to share loss and destocking, as well as in its Core Laboratory business due to Value-Based Procurement (VBP).
Despite the mixed results in certain segments, Abbott Laboratories reaffirmed its full-year 2024 organic growth guidance. The company also increased the midpoint (MP) of its earnings per share (EPS) range, signaling a positive outlook. Looking forward to 2025, Abbott Laboratories considers high single-digit to 10% sales and EPS growth as a "good starting point."
The analyst from Jefferies noted the positive aspects of Abbott's recent performance but cited valuation and ongoing litigation as reasons for the Hold rating. Nevertheless, the slight increase in the price target reflects an optimistic view on the company's financial results and growth potential.
In other recent news, Abbott Laboratories has been making significant strides. The company reported an impressive third-quarter performance, with organic sales growth surpassing 8% and adjusted earnings per share of $1.21. This strong performance led to the company raising its guidance for the third time this year, attributing the positive adjustment to robust device sales.
Stifel financial firm has updated its outlook on Abbott Laboratories, increasing the price target from $125.00 to $130.00 while maintaining a Buy rating on the stock. This adjustment follows Abbott's earnings call where the company projected continued robust growth. Abbott's CEO, Robert Ford (NYSE:F), anticipates high single-digit revenue growth and double-digit earnings growth as the company progresses towards 2025.
Notably, Abbott'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. Despite challenges in international pediatric nutrition markets and Core Lab Diagnostics due to commercial execution issues and regulatory changes in China, the company remains confident.
In addition, the company's Diabetes Care sales surpassed $1.6 billion, marking a 21% increase, and a new $7 billion share repurchase program was authorized. These are among the recent developments that highlight Abbott's ongoing growth and positive financial performance.
InvestingPro Insights
Abbott Laboratories' recent performance aligns with several key metrics and insights from InvestingPro. The company's market cap stands at an impressive $205.29 billion, reflecting its significant presence in the Healthcare Equipment & Supplies industry. Abbott's revenue for the last twelve months as of Q2 2024 was $40.73 billion, with a modest growth of 1.24%, consistent with the company's recent quarterly report.
InvestingPro Tips highlight Abbott's strong dividend history, having raised its dividend for 11 consecutive years and maintained payments for 54 years. This aligns with the company's stable financial position mentioned in the article. Additionally, Abbott is trading near its 52-week high, which corresponds with Jefferies' increased price target.
The company's P/E ratio of 37.18 suggests it's trading at a high earnings multiple, which may explain Jefferies' cautious Hold rating despite the positive outlook. Abbott's ability to cover interest payments with its cash flows indicates financial stability, supporting its reaffirmed growth guidance.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Abbott Laboratories, providing a deeper understanding of the company's financial health and market position.
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