In this article, we discuss the 5 stocks receiving price-target hike from analysts. If you want to see more such stocks on the list, go directly to Analysts Are Increasing Price Targets of These 10 Stocks.
05. Abbott Laboratories (NYSE:ABT)
Upside Potential: 15%
Abbott Laboratories (NYSE:ABT) is an Illinois, United States-based healthcare company. On July 24, Barclays analyst Matt Miksic increased the price target for Abbott Laboratories (NYSE:ABT) to $132 per share, up from the previous target of $127. Despite the upward adjustment in the price target, Miksic maintains an Overweight rating on Abbott Laboratories (NYSE:ABT) stock, indicating his continued positive outlook on the company’s performance. This upward revision in the price target suggests that the analyst expects Abbott Laboratories (NYSE:ABT) stock to experience further growth and believes it has the potential to outperform the market and its peers. The new price target of $132 indicates a level at which the analyst believes the stock could reach in the future, reflecting confidence in the company’s fundamentals, products, and potential for future earnings growth. As an “Overweight” rating typically suggests a recommendation to buy more of the stock compared to its benchmark weighting, this reaffirms Miksic’s confidence in Abbott Laboratories (NYSE:ABT) future prospects and potential for sustained success in its industry.
Here’s what Polen Capital said about Abbott Laboratories (NYSE:ABT) in its Q1 2023 investor letter:
“As stated below in the portfolio activity section, Abbott Laboratories (NYSE:ABT) is expected to see roughly $6 billion in COVID test sales evaporate this year, creating a headwind for margins and underlying earnings per share. As long-term owners of the business, these test sales were never part of our original investment case. The core business, our primary focus, has a clear path of growing high single digits in 2023 with durable growth beyond, in our view. We believe the current price of 23x NTM P/E , while reasonable, is also misleading considering earnings this year will be artificially depressed because of the drop in COVID testing sales. On normalized earnings, the price is lower. We anticipate underlying EPS growth of at least low-teens over the next three to five years.
Lastly, we trimmed Abbott Laboratories, bringing it back to a more average position size and to also fund our increase in Thermo Fisher. Abbott is entering a year in which the company is expected to see approximately $6bn in COVID-19 test sales disappear, thus, creating a headwind for margins and EPS. That said, the core business has a clear path to growing high single digits in FY23. EPS grew at a 20% CAGR from 2019-2022, far beyond our expectations when we initiated our investment. Now, we expect a more normal growth rate of low teens EPS beyond this year. Further, management’s adeptness at allocating capital continues to impress us. We expect Abbott to drive top line growth without heavily investing in R&D and SG&A this year— management effectively “front-loaded” those investments in 2021 and 2022 when COVID test sales created a bolus of cash. We believe this should allow for leverage on the operating margin going forward. Combined, Abbott and Thermo Fisher now represent 7% of the Portfolio.”
