Abbott Labs' Diversification And Diagnostics Leverage Paying Off Now

As everyone scrambles to figure out what Covid-19 will mean for health care providers, patients, and companies, Abbott Labs (ABT) is carrying on pretty well, with the shares up on a year-to-date basis, helped by a strong first quarter report. While Abbott is definitely going to see a hit from deferred procedures in areas like cardiac rhythm management, vascular, electrophysiology, and neuromodulation, close to half of the business is more consumer-focused (and likely to hold up better) and the diagnostics business is likely to prove key to getting the U.S. economy back open and on its feet.

As a huge and well-followed company, it doesn’t surprise me that this is now reflected in the share price. Relative to a stock like Stryker (SYK), which is likely to see a much bigger near-term hit to procedure deferrals, Abbott doesn’t look so interesting on a long-term basis, though I won’t understate the possibility that diagnostics could drive some upside from here.

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Abbott Labs' Diversification And Diagnostics Leverage Paying Off Now