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Abbott Laboratories ABT

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Abbott Wins on Two Fronts in Third Quarter; We've Raised Our Fair Value Estimate

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

Abbott benefited on two fronts in the third quarter--by increased demand for COVID-19 diagnostics as the delta variant spread and the recovery in non-pandemic demand for nutritional products and medical devices that didn’t seem to be hindered by the increased viral transmission during the quarter. We’ve raised our fair value estimate moderately to $104 per share to reflect this outperformance. We have also adjusted our projections to reflect our expectations for ongoing COVID-19 diagnostic demand that stabilizes at a higher level in 2022 than we’d thought earlier. Aside from the robust growth seen in rapid diagnostics, we were also pleased to see solid mid-single-digit quarterly growth in cardiac rhythm management and electrophysiology versus the normal third quarter in 2019. Abbott’s narrow moat looks solid to us, especially considering the lineup of new products in the works.

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Company Profile

Business Description

Abbott manufactures and markets medical devices, adult and pediatric nutritional products, diagnostic equipment and testing kits, and branded generic drugs. Products include pacemakers, implantable cardioverter defibrillators, neuromodulation devices, coronary stents, catheters, infant formula, nutritional liquids for adults, and immunoassays and point-of-care diagnostic equipment. Abbott derives approximately 60% of sales outside the United States.

100 Abbott Park Road
Abbott Park, IL, 60064-6400
T +1 224 667-6100
Sector Healthcare
Industry Medical Devices
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 109,000