Investing.com — Oppenheimer initiated coverage of Abbott Laboratories (NYSE:) with an Outperform rating and a $130 price target in a note on Tuesday, citing a favorable risk/reward profile.
According to Oppenheimer, Abbott is positioned as a diversified healthcare giant, combining a strong medtech portfolio with non-medtech operations.
The firm notes that while Abbott faces some headwinds in its non-medical technology segments, particularly in pediatric nutrition and declining COVID-19 diagnoses, the company's overall outlook remains constructive.
They said Abbott's MedTech portfolio contributes about 45% of its global sales and is expected to grow at a CAGR of 11-13%.
Additionally, the firm highlights Abbott's strategic pricing as a key driver of its market share growth, noting, for example, that “Libre's ~50% lower pricing has quickly catapulted it to leadership status,” which leads to a strong CAGR of 15-20% in its diabetes segment.
Abbott's AVEIR leadless pacemaker is also expected to see growth, taking advantage of a 2- to 4-fold price increase.
Innovation is another major focus, and Oppenheimer points to Abbott's strong product portfolio, including launches such as TriClip in TTVR, Amulet in LAAOS and aspirin-free LVAD, as critical to its long-term growth potential.
“Even in OTC CGM, ABT has caught up to DXCM in accuracy,” the analysts noted, increasing confidence in Abbott's ability to compete in key markets.
Despite challenges in its non-medical technology businesses, particularly due to litigation on the pediatric formulations side, Oppenheimer expects these headwinds to ease by FY26, making comparisons easier and paving the way for the long-term revenue growth.
With a disciplined M&A approach and strong free cash flow of $7.7 billion annually, Oppenheimer believes Abbott is well positioned for continued growth, with expected EPS growth of 12-15% in the coming years. coming years.
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