Abbott (ABT) Hits a 52-Week High: What's Driving the Stock?

Share price of Abbott ABT scaled a new 52-week high of $55.11 on Oct 6, eventually closing lower at $54.92. The company has gained 6.7% over the past month, much higher than the S&P 500’s gain of 2.6%. Abbott has also outperformed the broader industry’s gain of 1.8% last month. The stock has a market cap of $95.42 billion.

Further, Abbott’s estimate revision trend for the current year has been favorable. In the past 60 days, seven estimates moved up while one moved down. Estimates were up from $2.48 per share to $2.49 over the same time frame.

The company also has a trailing four-quarter average positive earnings surprise of 4.6%. Its positive long-term growth of 10.7% holds promise.

 

Abbott carries a Zacks Rank #3 (Hold). The company has an impressive Growth Style Score of B. Our Growth Style Score highlights all the vital metrics of a company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 offer the best investment opportunities.

Growth Drivers

The market is upbeat about Abbott’s  acquisition of Alere that got completed on Oct 3, after facing several regulatory hurdles. The buyout should help the company gain access to new channels and geographies, including entries into fast growing outlets, such as doctors’ offices, clinics, pharmacies and at-home testing.

Another major upside for the company is the recent FDA approval for the FreeStyle Libre Flash glucose monitoring system in the United States. The market is also optimistic about Abbott gaining national reimbursement for FreeStyleLibre glucose monitoring system from National Health Service (NHS) Business Services Authority in the U.K. This has been a major breakthrough in the company’s diabetics business.

Also it is worth a mention that Abbott’s Ellipse implantable cardioverter defibrillator (ICD) recently gained FDA approval for magnetic resonance (MR) conditional labeling.

All these factors are expected to drive the company’s share price further.

Key Picks

A few better-ranked stocks in the medical sector are Orthofix International N.V. OFIX, Luminex Corporation LMNX and IDEXX Laboratories, Inc. IDXX. Orthofix International and Luminex sport a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Orthofix International has a long-term expected earnings growth rate of 11.8%. The stock has rallied roughly 9.2% over the last three months.

Luminex has a long-term estimated earnings growth rate of 16.3%. The stock gained 7.4% last month.

IDEXX Laboratorieshas a long-term expected earnings growth rate of 19.8%. The stock has gained 37.1% in the last year.

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