We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Abbott’s (ABT - Free Report) diversified business portfolio is well-positioned to drive continued momentum in 2024. However, Abbott is facing a challenging business environment globally. ABT currently carries a Zacks Rank #3 (Hold).
Abbott continues to expand its Diagnostics business foothold (consisting of 21.2% of the total revenues in the second quarter of 2024). Over the past few quarters, the company has witnessed increased demand for routine diagnostics (excluding COVID-19 testing sales), particularly in the United States and internationally.
The company is particularly gaining from the strong adoption of its market-leading systems and demand for testing that takes place in a variety of settings, including hospitals, laboratories, urgent care centers, physician offices, retail pharmacies and blood screening facilities.
Within Abbott’s Established Pharmaceuticals Division (EPD) business, its unique branded generics model has been built to focus specifically on key emerging countries where long-term growth in medicines is guaranteed by favorable demographic trends, including increasing populations, growing middle classes, aging populations with the related rise in chronic diseases and an increasing focus on expanding access to healthcare. The year 2023 marked the third consecutive year of double-digit organic sales growth within EPD. Abbott’s EPD sales in the second quarter of 2024 increased 8.1% organically.
Further, Abbott’s Diabetes Care business continues to benefit from the growing sales of its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. In a relatively short span, FreeStyle Libre has achieved global leadership among continuous glucose monitoring (CGM) systems for both Type 1 and Type 2 users.
On the flip side, the challenging macroeconomic scenario in the form of the ongoing complex geo-political situation globally, specifically where Abbott operates, is driving higher-than-anticipated increases in expenses in terms of raw materials and freight. These could also result in broader economic impacts and security concerns, affecting the company’s business in the upcoming months. Industrywide, it has been seen that the deteriorating global economic environment is reducing demand for several MedTech products, resulting in lower sales and lower product prices while increasing the cost of goods and operating expenses of the businesses of the MedTech companies.
In the second quarter, Abbott incurred a 2.7% increase in the cost of products sold (excluding amortization expense). Selling, general and administration expenses were up 7.2% year over year resulting in a mere 18-bps improvement in operating margin to 20.6%.
Further, following the official ending of the public health emergency in May 2023, Abbott is experiencing a continuous decline in COVID testing-related demand. In Rapid Diagnostics, sales decreased 19.8% organically in the second quarter of 2024 due to the lower demand for COVID-19 tests. Within Molecular Diagnostics too, organic sales fell 9.4% year over year.
In the upcoming months, too, this year-over-year decline in testing demand is expected to mar Abbott’s overall Diagnostics business sales growth.
Exact Sciences’ shares have fallen 25.3% in the past year. Estimates for the company’s loss per share have improved from $1.09 to 95 cents for 2024 and from 26 cents to 6 cents for 2025 in the past 30 days.
EXAS’ earnings beat estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 56.2%. In the last reported quarter, it posted an earnings surprise of 75.7%.
Estimates for Boston Scientific’s 2024 earnings per share have moved to $2.40 from $2.36 in the past 30 days. Shares of the company have gained 47.8% in the past year compared with the industry’s growth of 13.7%.
BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%. In the last reported quarter, it delivered an earnings surprise of 6.9%.
Estimates for SiBone’s 2024 loss per share have narrowed to 89 cents from 95 cents in the past 30 days. Shares of the company have decreased 20.6% in the past year against the industry’s 12.3% growth.
SIBN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.4%. In the last reported quarter, it delivered an earnings surprise of 15.4%.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Abbott's Core Businesses Thrive Despite Macroeconomic Issues
Abbott’s (ABT - Free Report) diversified business portfolio is well-positioned to drive continued momentum in 2024. However, Abbott is facing a challenging business environment globally. ABT currently carries a Zacks Rank #3 (Hold).
Abbott continues to expand its Diagnostics business foothold (consisting of 21.2% of the total revenues in the second quarter of 2024). Over the past few quarters, the company has witnessed increased demand for routine diagnostics (excluding COVID-19 testing sales), particularly in the United States and internationally.
The company is particularly gaining from the strong adoption of its market-leading systems and demand for testing that takes place in a variety of settings, including hospitals, laboratories, urgent care centers, physician offices, retail pharmacies and blood screening facilities.
Within Abbott’s Established Pharmaceuticals Division (EPD) business, its unique branded generics model has been built to focus specifically on key emerging countries where long-term growth in medicines is guaranteed by favorable demographic trends, including increasing populations, growing middle classes, aging populations with the related rise in chronic diseases and an increasing focus on expanding access to healthcare. The year 2023 marked the third consecutive year of double-digit organic sales growth within EPD. Abbott’s EPD sales in the second quarter of 2024 increased 8.1% organically.
Further, Abbott’s Diabetes Care business continues to benefit from the growing sales of its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. In a relatively short span, FreeStyle Libre has achieved global leadership among continuous glucose monitoring (CGM) systems for both Type 1 and Type 2 users.
Abbott Laboratories Price
Abbott Laboratories price | Abbott Laboratories Quote
On the flip side, the challenging macroeconomic scenario in the form of the ongoing complex geo-political situation globally, specifically where Abbott operates, is driving higher-than-anticipated increases in expenses in terms of raw materials and freight. These could also result in broader economic impacts and security concerns, affecting the company’s business in the upcoming months. Industrywide, it has been seen that the deteriorating global economic environment is reducing demand for several MedTech products, resulting in lower sales and lower product prices while increasing the cost of goods and operating expenses of the businesses of the MedTech companies.
In the second quarter, Abbott incurred a 2.7% increase in the cost of products sold (excluding amortization expense). Selling, general and administration expenses were up 7.2% year over year resulting in a mere 18-bps improvement in operating margin to 20.6%.
Further, following the official ending of the public health emergency in May 2023, Abbott is experiencing a continuous decline in COVID testing-related demand. In Rapid Diagnostics, sales decreased 19.8% organically in the second quarter of 2024 due to the lower demand for COVID-19 tests. Within Molecular Diagnostics too, organic sales fell 9.4% year over year.
In the upcoming months, too, this year-over-year decline in testing demand is expected to mar Abbott’s overall Diagnostics business sales growth.
Key Picks
Some better-ranked stocks in the broader medical space are Exact Sciences (EXAS - Free Report) , Boston Scientific (BSX - Free Report) and SiBone (SIBN - Free Report) . Each of these carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Exact Sciences’ shares have fallen 25.3% in the past year. Estimates for the company’s loss per share have improved from $1.09 to 95 cents for 2024 and from 26 cents to 6 cents for 2025 in the past 30 days.
EXAS’ earnings beat estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 56.2%. In the last reported quarter, it posted an earnings surprise of 75.7%.
Estimates for Boston Scientific’s 2024 earnings per share have moved to $2.40 from $2.36 in the past 30 days. Shares of the company have gained 47.8% in the past year compared with the industry’s growth of 13.7%.
BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%. In the last reported quarter, it delivered an earnings surprise of 6.9%.
Estimates for SiBone’s 2024 loss per share have narrowed to 89 cents from 95 cents in the past 30 days. Shares of the company have decreased 20.6% in the past year against the industry’s 12.3% growth.
SIBN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.4%. In the last reported quarter, it delivered an earnings surprise of 15.4%.