Abbott Laboratories (NYSE: ABT) stock gained over 4% yesterday after the healthcare company reported better-than-expected second-quarter results. The company’s solid performance was driven by strong momentum in its core business, supported by an increase in surgical procedure volumes and demand for its diabetes care devices.
ABT reported Q2 adjusted earnings of $1.08 per share, which is higher than analysts’ estimates of $1.05 per share but 24.5% lower than earnings reported in the prior-year period.
Similarly, revenue declined 11.4% year-over-year to $9.98 billion compared to the prior-year period. Meanwhile, the topline outpaced the Street’s estimate of $9.71 billion. Nevertheless, excluding the impact of COVID-19 testing sales from the prior year, sales increased by 11.5% on an organic basis.
Remarkably, Abbott’s management has raised its guidance for organic sales growth in 2023 to low double-digit growth, owing to strong performance in key business areas. However, the company has lowered its 2023 COVID-related sales outlook to $1.3 billion from the previous forecast of $1.5 billion.
What is the Future of ABT Stock?
Abbott’s new product introductions and key regulatory approvals are indeed promising for the company’s growth and innovation. Also, the Dividend Aristocrat has an impressive track record of increasing dividends for 51 consecutive years, making it an attractive option for income-seeking investors. Moreover, with strong free cash flow, ABT is well-positioned to continue its dividend growth.
The Wall Street community remains optimistic about the stock, with a Strong Buy consensus rating based on four Buys and one Hold. The average Abbott price target of $120.80 implies an upside potential of 8.02%.
