Credit Suisse Upgrades ABT to Outperform

Monday, May 19, 2014, Credit Suisse upgraded

to Outperform from Neutral following ABT's announcement to acquire

and raised the Target Price to $46 from $44. Credit Suisse analyst Bruce Nudell says the acquisition, which has an estimated value of $3.3 billion, is expected to close in 2014 and add $900 million or, $0.07/share to 2015 sales/EPS with no material 2014 impact. Nudell raised 2014 EPS estimates to $2.23 from $2.22. Nudell stated the increased Target Price derives from raised estimates and a higher assumed terminal growth rate, while noting that if ABT divest the slower growth developed markets portion of its Established Pharmaceuticals Division (reported by Retuers, but not confirmed by ABT) there could be upside to growth estimates. Under-performance at the Established Pharmaceuticals Division has been one of the key reasons ABT shares have been under-performing. The ABT acquisition announcement is seen as an important first step in potentially multi-step processes to enhance growth at the Established Pharmaceuticals Division which, in turn, would increase growth and valuation. ABT shares were up 0.54 to 39.60 from the previous close of 39.06 at 12:40PM EDT.