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6 Reasons Why William Blair Turned Bullish On Abbot Laboratories

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6  Reasons Why William Blair Turned Bullish On Abbot Laboratories
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Abbott Laboratories (NYSE: ABT) reported fourth-quarter results that were highlighted by a top- and bottom-line beat and a guidance range for the first quarter that came in ahead of the consensus estimate.

The Analyst

William Blair's Margaret Kaczor upgraded Abbott Laboratories' stock from Market Perform to Outperform.

The Thesis

After Abbott Laboratories posted a revenue and earnings per share beat, Kaczor gave six reasons for turning bullish on the stock. (See the analyst's track record here.) 

  • Trends seen across multiple business segments are sustainable and will help the company post a mid- to high-single-digit sales growth rate and a mid-teens earnings growth rate over the longer term. This strong growth profile makes Abbott among the best within the entire large-cap med tech space.
  • Abbott Laboratories boasts multiple ongoing and upcoming product lines that represent multi-hundred million dollar sales opportunities over the next few years.
  • Management continues to spend hundreds of millions to support its multiple products, but these are solid investments and will taper down over time while creating earnings leverage.
  • As the company continues to pay down its large debt load, it will free up capital in 2019 and beyond for share repurchases, M&A activity or other investments.
  • Any risk associated with international pediatric nutritional sales appear to have stabilized in the fourth quarter.
  • Abbott Laboratories' stock valuation remains "reasonable" despite a more than 50-percent gain over the past year alone.

Price Action

Shares of Abbott Laboratories hit a new all-time high of $64.80 on Thursday and were trading higher by more than 2 percent on the day.

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Photo from Wikimedia. 

Latest Ratings for ABT

DateFirmActionFromTo
Oct 2018Raymond JamesMaintainsOutperformOutperform
Oct 2018BarclaysInitiates Coverage OnOverweight
Oct 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for ABT
View the Latest Analyst Ratings

Posted-In: Margaret Kaczor Medical Technology MedtechAnalyst Color Upgrades Health Care Analyst Ratings General Best of Benzinga

 

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