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Commanding a market cap of $179.6 billion, Abbott Laboratories (ABT) provides innovative medical devices and health care solutions for various medical needs. Based in North Chicago, Illinois, the company operates in four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Abbott fits this criterion perfectly, exceeding the mark. Abbott is renowned for its cutting-edge healthcare innovations, exemplified by flagship products such as Pedialyte, Similac, and FreeStyle Libre, which significantly contribute to the company's robust revenue generation across its diversified segments.
However, Abbott is down almost 14.2% from its 52-week high of $121.64, achieved in early March. Shares of ABT are down 12.5% over the past three months, underperforming the broader US Medical Devices iShares ETF's (IHI) 3% loss over the same time frame.
Longer term, ABT is down 5.1% on a YTD basis, lagging behind IHI's 4.1% gains. Moreover, shares of Abbott have gained marginally over the past 52 weeks, compared to IHI's 4.5% gains over the same time frame.
To confirm the bearish price trend, ABT has been trading below its 50-day moving average since mid-March and remained below its 200-day moving average since May.
Abbott has been underperforming due to concerns about a potential recession, declining revenues, and ongoing investigations by the U.S. FTC into collusion allegations with other companies regarding state contracts for baby formula. Moreover, the company reported its Q1 earnings results, beating Wall Street’s expectations fueled by strong medical device sales, yet experienced a 3% drop in its shares following the result on April 17 due to disappointment surrounding its annual forecast.
Nevertheless, top rival Align Technology (ALGN) is underperforming – not just ABT but the broader equity benchmarks. ALGN shares have declined around 16% over the past 52 weeks and are down 6.6% on a YTD basis.
Despite ABT’s weak price action, analysts are optimistic about its prospects. The stock has a consensus rating of "Strong Buy" from the 20 analysts in coverage, and the mean price target of $126.23 is a premium of 22.3% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
