Back to top

Image: Bigstock

Abbott Banks on New Approvals and Buyouts, Competition Rife

Read MoreHide Full Article

On Sep 19, we issued an updated research report on Abbott Laboratories (ABT - Free Report) . Notably, branded generics and international diabetes businesses of Abbott should drive growth in the coming quarters. Nevertheless, a competitive environment persists to raise concerns for Abbott. The stock carries a Zacks Rank #3 (Hold).

Over the past year, shares of Abbott have outperformed its industry. The stock has surged 31.9% compared with the industry's 21.5% rally.

Notably, in second-quarter 2018, Abbott once again steered past the Zacks Consensus Estimate for both earnings as well as revenues. We are also optimistic about the strong and consistent performance delivered by the company’s EPD and Medical Devices segments. Also, solid contributions from Diagnostics and Nutrition businesses encourage us. 

We believe, the company’s receipt of FDA approval for XIENCE Sierra coronary stent system as well as a reimbursement nod in Japan for the same device will help it revive the dull Vascular business. Within Structural Heart, the strong worldwide uptake of MitraClip therapy further improves following the recent approval of its next-generation version by the regulatory body.

We are also impressed by Abbott’s progress with Alere integration. Synergies from this consolidation in the form of revenues drawn from Rapid Diagnostics have been driving the company’s growth. Meanwhile, the company’s emerging market performance has been extremely promising owing to several strategic developments.

On the flip side, Abbott’s sluggish pediatric business in China continues to mar growth. Management is concerned about the prevalent economic problems in Venezuela that are expected to remain unresolved for some time. Also, foreign exchange is a major headwind for Abbott as a considerable portion of its revenues comes from outside the United States.

Key Stocks

A few better-ranked stocks in the broader medical space are athenahealth , Intuitive Surgical (ISRG - Free Report) and Veeva Systems (VEEV - Free Report) .

athenahealth has an expected long-term earnings growth rate of 17.6%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical’s expected long-term earnings growth rate is pegged at 14.7%. The stock flaunts a Zacks Rank of #1.

Veeva Systems’ long-term earnings growth rate is projected at 19.3%. The stock is a Zacks #1 Ranked player.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Abbott Laboratories (ABT) - free report >>

Intuitive Surgical, Inc. (ISRG) - free report >>

Veeva Systems Inc. (VEEV) - free report >>

Published in