Here’s Why You Should Invest In Abbott Stocks (ABT) Now


Abbott Laboratories ABT is well positioned for growth in the coming months, supported by solid and continued organic sales growth in each of its operating segments. In addition, the outlook for 2021 is encouraging. However, downsides can result from headwinds in exchange rates and a difficult business environment.

Over the past year, the shares of this company Zacks Rank # 2 (Buy) have gained 28.7% compared to the industryis down 3.5%. The S&P 500 rose 28.6% over the same period.

The renowned provider of a diverse line of health products has a market capitalization of $ 221.16 billion. The company forecasts 12% growth over the next five years and expects to maintain strong sector performance. Additionally, it has beaten estimates in three of the past four quarters and missed a quarter, delivering a surprise of 18.47% on average.

Taking advantage of the company’s current growth and short-term bullish outlook, the company is worth investing in for now.

Main growth drivers

Impressive Third Quarter Results: Abbott reported better-than-expected earnings and sales in the third quarter of 2021. Overall, the year-over-year improvements have been solid. Excluding sales related to COVID-19 testing, which totaled $ 1.9 billion in the quarter, organic sales were up 12% year-over-year. A major point of encouragement, although rates of COVID-19 cases increased in the United States and other regions during the third quarter, the company saw strong growth in its more consumer-oriented business such as nutrition, established pharmaceuticals and diabetes care. This mitigated the modest impacts of the pandemic that Abbott has witnessed on the rise in cases in some areas of its hospital operations.

1 year price performance

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Diagnoses develop in the midst of a pandemic: Sales of diagnostic products increased by more than 45% (up 12.5% ​​excluding sales related to COVID-19 tests) in the third quarter. With the peak of Delta variant cases, especially in the United States, the demand for testing has increased dramatically, especially for rapid testing. In the third quarter, the company sold more than 225 million COVID-19 tests worldwide and shipped more than a billion tests since the start of the pandemic. Over the past several months, Abbott has established a global leadership position in rapid testing, including a capacity to supply more than 100 million tests per month.

Elevated orientation: Abbott has raised its adjusted earnings per share guidance for 2021. Adjusted earnings from continuing operations for the full year (excluding specified items of $ 1.45 per share) is now expected to be between $ 5.00 and $ 5.10 per share (compared to the previous range of $ 4.30 to $ 4.50).

Disadvantages

On the other hand, some factors have held back the stock’s rise in recent times.

Foreign currency translation has an impact on sales:Foreign currencies are a major hurdle for Abbott, as a considerable percentage of its income comes from outside the United States. The strengthening of the euro and some other developed market currencies hampered the company’s performance in international markets.

The tension continues in China: Abbott, while trying to expand its nutrition business into emerging markets, faces weakness in Greater China due to difficult market dynamics. Particularly in the area of ​​pediatric nutrition, the company fears new food safety regulations and the resulting oversupply of products in the market.

Estimate trends

Abbott is seeing a positive estimate revision trend for 2021 (end December 31). Over the past 90 days, Zacks’ consensus estimate for its earnings has shifted 14.3% north to $ 5.05.

Zacks’ consensus estimate for 2021 revenue is set at $ 42.07 billion, suggesting growth of 21.6% from the figure released a year ago.

Other key choices

A few other actions in the wider medical space that investors may consider are Apollo Endosurgery, Inc. PEN, Cerner Corporation CERN and Western Pharmaceutical Services, Inc. WST, each wearing a Zacks Rank # 2. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

Apollo Endosurgery has a long-term profit growth rate of 7%. The company’s profits have beaten estimates over the past four quarters, delivering a surprise of 25.6% on average.

Apollo Endosurgery has outperformed its industry over the past year. APEN gained 129.1% compared to the industry’s 11.1% growth.

Cerner has a long-term earnings growth rate of 13.3%. The company’s profits have exceeded estimates in the last three of the four quarters and achieved the same results in one, delivering a surprise of 3.2% on average.

Cerner has outperformed its industry over the past year. CERN gained 18.8% against a drop of 39.3% for industry.

West Pharmaceutical posts a long-term profit growth rate of 27.6%. The company’s profits have beaten estimates over the past four quarters, offering a surprise of 29.4% on average.

West Pharmaceutical has outperformed its industry over the past year. WST grew 65.2% compared to the industry’s 16.2% increase.

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Abbott Laboratories (ABT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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