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Here's Why You Should Add Abbott (ABT) to Your Portfolio Now

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Abbott (ABT - Free Report) is on a healthy growth trajectory of late. The stock has gained 4.8% over the last three months, ahead of the S&P 500’s 2.5% gain and the broader industry’s 1.5% decline.

The stock has a market cap of $89.9 billion. The company’s current-year growth rate is also favorable at 13.1% compared with the 4.5% increase of the broader industry. With solid prospects, this Zacks Rank #2 (Buy) stock emerges an attractive pick.

The Illinois-based medical device major’s estimate revision trend for the current year has also been positive. In the past couple of months, seven analysts moved north with just one movement in the opposite direction. The estimates were marginally revised upward from $2.48 per share to $2.49 over the same time frame.

The company also has a trailing four-quarter average positive earnings surprise of 4.6%.

Let’s find out whether the recent positive trend is a sustainable one.

The market is upbeat about Abbott gaining national reimbursement for FreeStyleLibre glucose monitoring system from National Health Service (NHS) Business Services Authority in the United Kingdom. This has been a major breakthrough in diabetics business.The reimbursement grant will make FreeStyleLibre system widely available to around 3.5 million people in the United Kingdom.

Also, other developments including Abbott’srecent FDA approval of Full MagLev HeartMate 3 Left Ventricular Assist Device (LVAD) are encouraging.

In addition, the company announced receipt of a national reimbursement for its FreeStyle Libre glucose monitoring system in Japan. This breakthrough has widened the medical device major’s customer base in diabetes management.

The company also recently signed a $252-million managed equipment service contract with North West London Pathology (NWLP), hosted by Imperial College Healthcare NHS Trust. Abbott expects this alliance to solidify footprint in the rapidly-growing diagnostics market.

Abbott’s second-quarter performance has been promising with sales and adjusted earnings from continuing operations increasing year over year. With several strategic progresses made, we expect this growth stream to continue in days ahead.

Other Key Picks

Other top-ranked medical stocks are Edwards Lifesciences Corporation (EW - Free Report) , Chemed Corporation (CHE - Free Report) and Amedisys, Inc. (AMED - Free Report) . While Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), Chemed and Amedisys carry a Zacks Rank #2.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 19.5% over the last six months.

Chemed has a long-term expected earnings growth rate of 10%. The stock has gained 3.3% over the last six months.

Amedisys has a long-term expected earnings growth rate of 18.2%. The stock has gained 3.5% over the last six months.

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