Abbott (ABT) at a 52-Week High: What's Driving the Stock?
Shares of Abbott ABT rallied to a new 52-week high of $57.30 on Dec 20, closing the session nominally lower at $57.02. This represents a strong year-to-date return of approximately 48.4%, higher than the S&P 500’s 20.2%. The stock has a Zacks Rank #3 (Hold).
Taking the stable stock performance into consideration, we expect Abbott to scale higher in the quarters ahead. The company also has a trailing four-quarter average positive earnings surprise of 4.5%. Its positive long-term growth of 10.7% holds promise as well.
For the majority of the last three months, the company’s share price has considerably outperformed the broader industry. The stock has rallied 8.6% over the last three months, beating the industry’s gain of just 3.3%.
Factors Driving the Stock
Alere Acquisition: Abbott’s successful closure of the Alere acquisition after a prolonged legal battle has instilled confidence in investors. The acquisition closed in October 2017 under amended financial terms in favor of Abbott. Taking the attractive prospects of Point-of-care testing within the in vitro diagnostics market into consideration, Abbott is highly optimistic about the Alere integration. According to the company, the Alere buyout will significantly expand its diagnostics presence. Moreover, Abbott expects Alere to contribute around $475 million to its top line in 2017.
Recent FDA Approvals: Through 2017, Abbott is effectively focusing on core therapeutic areas. Recently, its FreeStyle Libre Flash received FDA approval. Also, it received approval for MR-conditional labeling for Ellipse ICD.
Developing Diabetes Business: There have been a slew of developments within the Diabetics business. We are upbeat about Abbott’s FreeStyle Libre Flash Glucose Monitoring System’s recent reimbursement approval in the U.K. Plus, the company recently announced receipt of Health Canada License for the same. In May 2017, the company received full or partial reimbursement from the French Health Ministry for the product.
Solid Emerging Market Performance: Abbott’s emerging market performance has been promising, courtesy of the latest strategic developments. Notably, the company has been witnessing double-digit growth in Brazil, Russia, India, and China of late.
Key Picks
A few better-ranked medical stocks are athenahealth, Inc. ATHN, Align Technology, Inc. ALGN and Luminex Corporation LMNX. Notably, athenahealth, Align Technology and Luminex sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
athenahealth has a long-term expected earnings growth rate of 22.3%. The stock has rallied roughly 27.3% over a year.
Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has gained 137.9% in a year.
Luminex has a long-term expected earnings growth rate of 16.3%. The stock has gained 2.9% in the past three months.
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