Abbott Laboratories Still Offers Attractive Valuation, UBS Says

MT Newswires Live
Oct 09

Abbott Laboratories' (ABT) diabetes, electrophysiology, and structural heart businesses' growth outlooks are underappreciated by investors, UBS Securities said in a note Wednesday, reiterating the stock as one of its top large-cap picks.

The brokerage said it views these three MedTech business lines as a "trifecta" of 10%-plus compound annual growth segments that support high-single-digit sales growth for the company.

The firm said Abbott's weighted average market growth rate is expected to rise by about 30 basis points to 7.3% from 2025 to 2028, supported by ramping market presence and innovation within those key business lines.

UBS said that while Abbott shares have risen about 18% so far this year, they still trade below high-growth large-cap peers such as Boston Scientific (BSX), Edwards Lifesciences (EW), and Stryker (SYK) despite a "competitive top and bottom-line growth profile."

The firm said it continues to see room for operating leverage, forecasting EBIT margin expansion of about 140 basis points to reach 24.9% by 2027, and sees upside potential as MedTech-driven sales outperform.

"We believe current valuation still looks attractive for one of our highest conviction large-cap calls," UBS said, adding that Abbott remains "one of the last GARP plays left."

The firm maintained its buy rating and $154 price target on the stock.

Price: 134.26, Change: +1.24, Percent Change: +0.93

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