Why doesn't ABT ever move? We seems to have been stuck here at $33 forever!
ABT stock just doesn't seem to want to move higher. We seem to be stuck in this trading range between $33-$35. I'm not selling but it would be nice if we could hit new highs like every other stock in the market. I should have bought BMY buy instead purchased Abbott. Just my luck lol. Anyway does anyone think we hit $40 sometime this summer?
There is no reason to expect upward price movement for ABT anytime soon. S&P has a 12-month price forecast of $36, which I think is optimistic. The markets for ABT's products are mature ones, and improving margins is about the only way for it to grow earnings, a slow process in healthcare. The forward PE estimates are in the range of 17-19, and that's plenty high enough until the new version of ABT proves that it can succeed without the earnings from pharmaceuticals that it divested. The price isn't moving until improved earnings drive it.
Trying to reply to hornmaster, but can't get a reply box. It sounds like you are talking about the kind of short term costs aimed at margin improvement that occur after a merger/takeover, when there are redundant manufacturing and personnel. In this case, with a divestiture of a component (ABBV) there are no such savings to be had. I think ABT is going to have to find ways to force suppliers to reduce their prices, in order for ABT to maintain their own prices and at the same time increase profits. Don't know how they're going to get that kind of leverage.
Chick, I agree with you and normally there are short term costs associated with margin improvements such as termination costs, plant and equipment write offs, product and package developments, etc. I do think there may be upside potential in the short run in expanding developing markets. Also, immediate investors are not excited about the low dividend payout.