Abbott Laboratories has been granted Emergency Use Authorization (EUA) by the US Food and Drug Administration (FDA) for its BinaxNow COVID-19 Ag Card rapid test used in the detection of Covid-19 infection.
Following the authorization, Abbott (ABT) said it has started to ship tens of millions of BinaxNow tests in September, planning to ramp up to 50 million tests a month from the beginning of October. The portable test, which provides results in 15 minutes, does not require any equipment for processing samples.
Instead, the BINAXNow test includes a companion app so that users can display a digital health pass as proof of a negative test result. If test results are positive, people receive a message to quarantine and talk to their doctor.
“The test will greatly expand access to rapid testing and help to ease the pressure on overburdened laboratories,” the statement said.
The test is the 6th test Abbott has launched in the US to detect the coronavirus pandemic. These include two molecular laboratory tests, the ID NOW rapid molecular point of care test and two antibody laboratory tests.
Credit Suisse analyst Matt Miksic late last month, raised the stock’s price target to a Street high of $136 (28% upside potential) from $109 and reiterated a Buy rating, amid optimism about Abbott’s Covid-19 tests. (See Abbott stock analysis on TipRanks)
Miksic points out while there is little debate among investors about the magnitude of near-term sales the new Covid-19 tests will generate, the question remains as to how long these sales will continue.
The analyst believes that Covid-19 tests, including the Abbott test, which can be performed without equipment, by a wide range of individuals, will be essential and are likely to be used in the longer-term as a tool for mass testing to try and mitigate the risk of the virus spreading as businesses and schools reopen.
The rest of the Street is cautiously optimistic on the stock. The Moderate Buy analyst consensus breaks down into 11 Buys versus 2 Holds and 1 Sell. With shares up 23% this year, the $117.55 average price target now implies another 10% upside potential over the coming year.
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