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Here's Why You Should Add Abbott Laboratories Right Now

Illinois-based global medical device company Abbott Laboratories ABT has been gaining investor confidence on consistent positive results.

Over the past three months, the company’s share price has outperformed the Zacks categorized Medical - Instruments sub-industry. The stock has gained 11.8%, higher than the broader industry’s gain of 10.1%. Abbott has also been performing better than the S&P 500 market over the same period. The stock has rallied 11.8%, compared to a mere 2.6% gain of the broader market.

For 2018, the company’s estimate revision trend is positive. The stock has witnessed two upward revisions over the last 60 days with no downward movement. Accordingly, earnings estimates moved up 0.36% to $2.77 for the next fiscal.

For 2018, the company’s estimate revision trend is also positive. The stock has witnessed two upward revisions over the last sixty days with no downward movement taking place. Accordingly, earnings estimate has moved up 0.36% to reach $2.77 for the next fiscal.

Based upon the promising estimates, solid past performance and a Zacks Rank #2 (Buy), the stock seems to be a lucrative pick for now. However, we would like to look into a few other factors to decide whether its a worthy pick for your portfolio?

A stellar first-quarter 2017 was a major market sentiment booster. Adjusted earnings in the quarter beat the Zacks Consensus Estimate by 11.6% and also improved 17.1% year over year.

The market is also upbeat about the company’s receipt of Health Canada License for FreeStyle Libre Flash Glucose Monitoring System. This will provide a further impetus to the Diabetes Care sales segment, which was up 20.2% in the last reported quarter on continued consumer acceptance of FreeStyle Libre internationally.

We expect Freestyle Libre to further contribute to Abbott’s top line in the coming quarters as apart from the Canadian development, the French Health Ministry recently granted national reimbursement for the device.

This apart, the market is looking forward to Abbott’s recent CE Mark for Confirm Rx Insertable Cardiac Monitor.  Post-approval, the product saw strong consumer acceptance with implants taking place in 10 countries across Europe. The company also announced CE Mark for its Tacticath Contact Force Ablation Catheter which seems to be another positive.

Continuing with its trend of extensive research and developing new products, the company launched two science-based nutrition drinks for better recovery from surgeries – Ensure Surgery Immunonutrition Shake and EnsurePre- Surgery Clear Nutrition Drink.

We are also bullish about the ongoing synergy achievements from Abbott’s acquisition of St. Jude Medical on Jan 4. The comprehensive combined portfolio seems to be quite promising. Post-integration, the company has started generating positive outcome.

Meanwhile, investor sentiments seem to be positive with regard to the impending Alere buyout. It’s worth noting here that the deal has been amended in favor of Abbott. Thus, the acquisition is expected to boost the company’s performance in the Point of care diagnostics market.

Other Key Picks

A few top-ranked medical stocks are Inogen, Inc. INGN, Varian Medical Systems, Inc. VAR and Edwards Lifesciences Corporation EW. Notably, Inogen sports a Zacks Rank #1 (Strong Buy), while Varian Medical and Edwards Lifesciences carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 24.4% over the last three months.

Varian Medical has a long-term expected earnings growth rate of 8%. The stock has gained around 14.3% over the last three months.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.22%. The stock has gained around 26.6% over the last three months.

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Abbott Laboratories (ABT): Free Stock Analysis Report
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