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Abbott Laboratories ABT

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Abbott Prepares for Shift in COVID-19 Diagnostics and Resumption of Device Procedure Volume

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

Narrow-moat Abbott posted first-quarter performance that showcased a mix of the favorable resumption of cardiac-related procedure volume as well as potential slowing of pandemic-related diagnostic growth. Following slight adjustments to our assumptions that failed to materially shift our valuation, we’re holding steady on our fair value estimate. We continue to view shares as overvalued. While we’re comfortable that Abbott should generally see robust growth in its medical device portfolio through this year, the softening of COVID-19 diagnostic testing remains the wild card, from our perspective. Both aspects of Abbott’s business will hinge heavily on how quickly the pandemic recedes. Considering how quickly vaccination has been going in the U.S., we anticipate stronger rebound in U.S. devices for the full year, and more muted results from Europe and Japan.

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Company Profile

Business Description

Abbott manufactures and markets medical devices, adult and pediatric nutritional products, diagnostic equipment and testing kits, and branded generic drugs. Products include pacemakers, implantable cardioverter defibrillators, neuromodulation devices, coronary stents, catheters, infant formula, nutritional liquids for adults, and immunoassays and point-of-care diagnostic equipment. Abbott derives approximately 60% of sales outside the United States.

100 Abbott Park Road
Abbott Park, IL, 60064-6400
T +1 224 667-6100
Sector Healthcare
Industry Medical Devices
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 109,000