Abbott Laboratories, the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Josh Jennings from TD Cowen maintained a Buy rating on the stock and has a $145.00 price target.
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Josh Jennings has given his Buy rating due to a combination of factors including Abbott Laboratories’ potential acquisition of Exact Sciences. This strategic move is expected to significantly enhance Abbott’s diagnostics business, which has been underperforming due to various external pressures. By acquiring Exact Sciences, Abbott could see a revitalization in its diagnostics segment, potentially returning to a 7% revenue growth rate and boosting company-wide organic revenue growth by approximately 50 basis points.
Furthermore, the acquisition would strengthen Abbott’s position in the oncology diagnostics and cancer screening markets, accelerating the global adoption of Exact Sciences’ products. The financial metrics of the deal, including a strong gross margin profile and cost synergies, suggest solid earnings per share accretion and return on invested capital in the long term. Abbott’s robust balance sheet supports the feasibility of this acquisition, allowing the company to offer a competitive acquisition premium, making the deal strategically beneficial.
In another report released today, Piper Sandler also maintained a Buy rating on the stock with a $150.00 price target.