Abbott Laboratories Is 'A Premium Asset At A Discount,' Says Barclays

Without specifically commenting on 2Q, Abbott Laboratories ABT management indicated that they were bullish about the future prospects of the businesses, Barclays’ Matthew Taylor said in a report. He maintained an Overweight rating for the company, with a price target of $48.

Following meetings with CFO Brian Yoor, VP-Investor Relations Scott Leinenweber and Senior Director- Investor Relations Mike Comilla, analyst Matthew Taylor said that 1Q seemed to have “got off to a good start,” with Abbott Laboratories witnessing continued demand growth in the emerging markets. This demand is unlikely to slowing going forward, and the underlying momentum from 1Q is expected to continue.

STJ Transaction

The St. Jude Medical, Inc. STJ transaction was expected to close by yearend and the goal of $500MM in synergies remained the same, Taylor mentioned. He added, “The stronger leg should help ABT run a better diversified model, in our view.”

Valuation Attractive

On a stand-alone basis, Abbott Laboratories is trading at a discount to its large-cap med-tech peers. If the Alere Inc ALR and St. Jude Medical transactions as well as their accretion were to be taken into account, Abbott Laboratories is at “a large delta from the group,” the analyst commented, adding, “We think investors should take advantage of current dislocation to buy ABT - a premium asset at a discount.”

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