Analyst Note| Debbie S. Wang |
Narrow-moat Abbott wrapped up 2020 with a stellar performance in the fourth quarter that exceeded our projections. We’ve raised our fair value estimate to $93 per share from $82 after incorporating recent results and increasing our estimates for 2021. Though consolidated results contained a mix of winners and losers, Abbott’s winners--primarily diagnostics--delivered outsize performance that more than offset weakness in other areas. Against the backdrop of the pandemic, we’ve seen evidence of competitive advantages that have solidified our view of the firm’s narrow economic moat. Among the intangible assets, we think Abbott's ability to innovate in diagnostics came to the fore in 2020. Since last spring, Abbott quickly developed an impressive array of SARS-CoV-2 diagnostic tests that ranged from gold-standard PCR tests to 15-minute point-of-care antigen tests.