Raymond James thinks Abbott Laboratories' (NYSE: ABT) 1Q results were solid and demonstrated the durable nature of ABT's portfolio, as three out of four business segments grew over 10% organically, with Nutrition growing 8% due to the recall.
The recall had a around $229 million impact on U.S. Nutrition sales. The analyst believes the variance between "mid and high single-digit" ex-CV guidance growth in 2022 is mainly due to the Nutrition recall.
The analyst lowered '22/'23 Nutrition estimates by $888 million /$875 million to reflect the recall. ABT now expects $4.5 billion of COVID-19-testing revenue (up from $2.5 billion prior), with most revenue falling in 1H FY22.
"We still suspect the COVID-testing can serve as a source of potential financial upside," writes the analyst. Libre (8% of sales, +26% y/y) missed slightly, but the Company is still comfortable with 25% growth in 2022.
Raymond James lowered the price target to $135, down from $145.
Wells Fargo writes that 2022 EPS guidance appears conservative given the testing upside. It notes that elective procedures were affected by omicron in the first half of Q1 and have since gradually improved, including into April.
The analysts have raised the FY22 revenue estimate to $41.7 billion ($40.86 billion previously) with an EPS estimate of $4.78 ($4.73 previously) to reflect the Q1 beat and 2022 guidance.
Q2 revenue estimate remains unchanged at $10.0 billion and raised EPS estimate to $1.08 ($1.06 previously). They lowered the 2023 EPS estimate to $4.75 from $5.00.
Price Action: ABT shares are up 0.73% at $123.54 during the market session on the last check Thursday.
