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Valued at a market cap of $202.6 billion, North Chicago, Illinois-based Abbott Laboratories (ABT) is a global healthcare company that discovers, develops, manufactures, and sells a wide range of healthcare products across various segments. With operations in pharmaceuticals, diagnostics, nutrition, and medical devices, it serves diverse markets worldwide, including emerging and developed regions.
Companies worth over $200 billion are generally described as “mega-cap” stocks, and Abbott Laboratories fits this criterion perfectly. Abbott is renowned for its innovative medical devices, particularly the FreeStyle Libre continuous glucose monitoring system, which revolutionized diabetes care.
Despite this, the company declined nearly 4% from its 52-week high of $121.64, shares of this medical devices and healthcare company have gained 3.1% over the past three months, lagging behind the broader Nasdaq Composite’s ($NASX) 9.5% return over the same time frame.
However, in the longer term, ABT stock is up 6.1% on a YTD basis, underperforming NASX’s 29.3% gains. Moreover, shares of ABT have gained 11.4% over the past 52 weeks, compared to NASX’s 35.6% returns over the same time frame.
Yet, ABT has been trading above its 200-day and 50-day moving average since August, despite slight fluctuations, indicating a bullish trend.
Abbott Laboratories has underperformed due to unfavorable foreign exchange impacts, declining demand for COVID-19 testing, higher raw material and freight costs, and reduced sales in its Diagnostics segment, despite growth in other areas like Diabetes Care and Established Pharmaceuticals.
Nevertheless, the stock rose by 1.5% on Oct. 16 following the company's Q3 earnings report, which showed better-than-expected results. Revenue totaled $10.6 billion, growing 5% year-over-year, and adjusted net income increased 6% to $2.1 billion, both exceeding analyst estimates. Furthermore, Abbott raised its full-year 2024 adjusted earnings guidance to a range of $4.64 per share to $4.70 per share and projected revenue growth of 9.5% to 10%.
ABT has outperformed its rival Johnson & Johnson (JNJ), which declined 2.3% over the past 52 weeks and 1.2% on a YTD basis.
Despite ABT’s underperformance relative to the broader market over the past year, analysts remain bullish about its prospects. The stock has a consensus rating of “Strong Buy” from 24 analysts in coverage, and as of writing, ABT is trading below the mean price target of $132.59.
