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Abbott (ABT) Launches Immunity Boosting Hydration Solution

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Zacks Equity Research
·4 min read
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Abbott Laboratories ABT recently announced the launch of a new Pedialyte formulation, Pedialyte with Immune Support, which contains key nutrients to support immune health. The product is expected to cater to those consumers who are looking for key immune-supporting nutrients in their hydration solution.

For investors’ note, the Pedialyte formulation contains nutrients like zinc, prebiotics and vitamin B12, which plays an important role in boosting immunity.

Pedialyte with Immune Support is one of the four new Pedialyte products designed to meet a range of hydration needs and is available in the pharmacy department in retail locations (including Walmart) or online.

It is to be noted that Pedialyte's original formulations were created to help children recover from symptoms of dehydration as it contained the required fluids and electrolytes. However, with the focus shifting to rapidly growing hydration needs among consumers (including adults), Abbott leveraged its expertise in nutrition innovation and expanded its suite of products to address the same.

With the recent launch, Abbott aims to strengthen its Nutritional Products business on a global scale.

Significance of the Launch

Per management, modifications in diet are a good way of immunity-boosting nutrient intake. Further, as the majority of the human immune system is in the digestive tract, nutrition becomes a critical aspect of immune health. Intake of Pedialyte with Immune Support is expected to aid people in recovering from illness, prevent dehydration as well as add immune-supporting nutrients to their diets.

Notably, hydration is an often-overlooked element of overall health which can help during one’s recovery from illnesses. Hence, the intake of Pedialyte with Immune Support is expected to meet that requirement.

Industry Prospects

Per a report by Grand View Research, the global dietary supplements market was estimated at $123.28 billion in 2019 and is anticipated to expand at a CAGR of 8.2% between 2020 and 2027. Factors like rising health concerns, and changing lifestyles and dietary habits are likely to drive the market.

Given the market potential, the launch is expected to significantly boost Abbott’s business.

Recent Developments in Nutrition Business

Of late, Abbott has been witnessing some developments within its Nutrition segment.

The company, in November, launched Similac Pro-Advance with 2'-Fucosyllactose Oligosaccharide† (2'-FL†) in Canada. Notably, it is the most innovative infant formula yet and is the first product in Canada with this breakthrough ingredient in infant formula.

Abbott, during its third-quarter earnings call in October, confirmed that increase in its nutrition sales was led by well-known adult nutrition brand Ensure. Robust growth in global adult nutrition growth in the quarter resulted from strong demand in the United States as well as the international market. Further, pediatric nutrition sales growth in the United States was led by Pedialyte rehydration brand.

Price Performance

Shares of the company have gained 23.6% in the past year compared with the industry’s 0.2% rise and the S&P 500’s 15.1% growth.

Zacks Rank & Key Picks

Currently, Abbott carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Hologic, Inc. HOLX, Thermo Fisher Scientific Inc. TMO and ResMed Inc. RMD.

Hologic’s long-term earnings growth rate is estimated at 17.4%. The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher’s long-term earnings growth rate is estimated at 18%. It currently carries a Zacks Rank #2 (Buy).

ResMed’s long-term earnings growth rate is estimated at 14.5%. The company presently carries a Zacks Rank #2.

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Hologic, Inc. (HOLX) : Free Stock Analysis Report
 
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