Abbott Laboratories ABT has been gaining investor confidence on continued positive results. The company’s share price has outperformed the S&P 500 over the past year. The stock has gained 32.6% in comparison to the market’s 3% rise in the said period.
This leading developer, manufacturer and seller of a diversified line of health care products has a market cap of $124.96 billion. The company has an expected earnings growth rate of 11.8% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Working in Favor of the Stock?
Diagnostics Arm Grows on Alinity
Within Diagnostics, sales have been growing substantially over the past few quarters. Alinity, the family of highly differentiated instruments, is achieving accelerated growth and strong competitive win rates in Europe. The global rollout of Alinity positions this business for consistent above-market growth in the years to come.
Alere Integration Synergies Impressive
The integration of Alere has added Rapid Diagnostics to Abbott’s existing leadership position in the $50-billion global diagnostics market. Alere’s complementary portfolio of diagnostic products, comprising tests for infections such as HIV, tuberculosis, malaria and dengue will be added to Abbott’s portfolio. Over the past few months, Abbott has made solid progress with the integration of this business and continues to see several levers for growth acceleration, including opportunities for geographic, platform and test menu expansion.
Progress With Diabetes Business
This business achieved growth of 35% in 2018 led by FreeStyle Libre which achieved global sales of more than $1 billion in 2018, an increase of 100% from the prior year. As of 2018-end, there are now approximately 1.3 million active users worldwide, of which approximately two-thirds are type 1 diabetics and one-third type 2.
In the United States, there has been an accelerating trend of new users as Abbott is ramping up its awareness efforts during the second half of the year.
Other Key Picks
Other top-ranked stocks in the broader medical space are Varian Medical Systems VAR, Illumina, Inc. ILMN and DexCom, Inc DXCM. Notably, each of these stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Varian’slong-term earnings growth rate is expected at 8%.
Illumina’slong-term earnings growth rate is expected at 21.5%.
DexCom’s second-quarter earnings per share are projected to grow 160%.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
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This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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