Abbott Labs Leveraging An Opportunity In Diagnostics While Looking Forward To Normalization

While I thought Abbott Labs (ABT) was relatively well-placed relative to its peers through the Covid-19 pandemic with my last update, I also thought that the valuation was pretty full overall. Since then, the shares have done a little better than peers like Becton Dickinson (BDX), Boston Scientific (BSX), and Medtronic (MDT), but not all that well compared to the S&P 500 (lagging by about 13%), and that’s with a better-than-expected second quarter and enough management confidence to give some guidance on full-year earnings.

There are certainly positive drivers here, including ongoing long-term growth in MitraClip procedures, long-term growth in the diabetes franchise, and further opportunities in diagnostics from the Covid-19 pandemic. I also like Abbott’s organizational flexibility, including its willingness to do both big acquisitions and big divestitures/spin-offs. My issue is just the valuation – the stock looks priced for a mid-single-digit annualized return that I just don’t find that interesting (though there aren’t a lot of bargains in big-cap med-tech).

Click here to continue:
Abbott Labs Leveraging An Opportunity In Diagnostics While Looking Forward To Normalization