In a report released yesterday, Joanne Wuensch from Citi maintained a Buy rating on Abbott Laboratories, with a price target of $155.00.
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Joanne Wuensch’s rating is based on Abbott Laboratories’ strategic acquisition of Exact Sciences, which is expected to significantly enhance its Diagnostics segment. This acquisition, valued at $23 billion, is anticipated to immediately contribute to revenue growth and improve gross margins, despite an initial dilution to EPS. By incorporating Exact’s cancer screening products, Abbott is poised to strengthen its position in the U.S. cancer screening and precision oncology diagnostics market, potentially increasing annual sales in this segment to over $12 billion.
Furthermore, the acquisition is projected to add substantial synergies, with management expecting $100 million in annual pre-tax benefits by 2028. Although the acquisition will initially increase Abbott’s debt levels, the company plans to maintain a balanced capital allocation strategy, including debt reduction. This strategic move aligns with Abbott’s long-term growth objectives, supporting a mid-teens growth profile over the next few years, which underpins Wuensch’s Buy rating for the stock.
According to TipRanks, Wuensch is a 4-star analyst with an average return of 5.8% and a 60.74% success rate. Wuensch covers the Healthcare sector, focusing on stocks such as Medtronic, Dexcom, and Johnson & Johnson.
In another report released yesterday, Piper Sandler also maintained a Buy rating on the stock with a $150.00 price target.