BofA says buy DexCom on weakness after Abbott’s Libre gets pump integration

After Abbott (ABT) announced yesterday that the FDA cleared both Libre 2 and Libre 3 for integration with automated insulin delivery systems, BofA analyst Travis Steed said the Libre 2 approval was expected, but the Libre 3 approval came earlier than expected. The firm sees Libre pump integration more as a positive for the insulin pump companies, helping drive pump penetration higher, than being a competitive dynamic for CGM. DexCom (DXCM) has very high brand awareness and loyalty within its Type 1 pump user base and BofA does not see patients in this cohort switching, the firm tells investors. BofA maintains a Buy rating on Abbott given it’s now trading at a more attractive valuation and "Libre alone can keep devices growing over the next five years." The firm also maintains a Buy rating on DexCom as it expects durable revenue growth for the next five years and would be a buyer on yesterday’s weakness.