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Abbott (ABT) Gains Ground on Solid EPD and Diabetes Arms

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On Mar 19, we issued an updated research report on Abbott Laboratories (ABT - Free Report) . The company has been consistently delivering solid organic growth in the Established Pharmaceuticals (“EPD”) and Diabetes segments. The stock currently carries a Zacks Rank #2 (Buy).

This leading developer, manufacturer and seller of a diversified line of health care products has outperformed its industry over the past year. The stock has gained 27.7% in comparison with the industry’s 6.6% rise.

The EPD business operates solely in emerging geographies, with leading positions in many of the largest and fastest growing pharmaceutical markets for branded generics in the world. These markets include India, Russia, China and Latin America.

The company recently noted that the Branded Generic operating model has positioned EPD for sustained above-market growth in many of these growing pharmaceutical markets. In the last reported quarter, sales were strong led by double-digit growth in both India and China.

We are also upbeat about Abbott’s Diabetes arm which achieved mid-30s growth led by FreeStyle Libre’s global sales of more than $1 billion in 2018, a 100% increase over the 2017 figure. As of 2018-end, there were approximately 1.3 million active users worldwide, of which approximately two-thirds were type 1 diabetics and one-third type 2.

Meanwhile, the United States has been seeing an accelerating trend of new users since Abbott ramped up its awareness efforts during the second half of 2018.

In Europe, the company initiated the launch of Libre 2.0, which offers optional alarms that set off when patients’ glucose levels fall, in the fourth quarter.

Moreover, we are upbeat about the company’s Diagnostics business delivering impressive performance over the past few quarters.  Synergies from the Alere consolidation in the form of revenues from Rapid Diagnostics have been driving growth. Furthermore, Alinity, family of highly differentiated instruments, is achieving accelerated growth and competitive win rates in Europe.

Other Key Picks

Other top-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Veeva Systems Inc. (VEEV - Free Report) and Hologic, Inc. (HOLX - Free Report) .

Integer Holdings projects an earnings growth rate of 31.2% for the first quarter. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Veeva Systems’ long-term earnings growth rate is projected at 14.8%. The stock currently carries a Zacks Rank of 2.

Hologic’s long-term earnings growth rate is projected at 8.9%. The stock presently has a Zacks Rank #2.

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