Abbott Labs stock price forecast for Q3 after Q2 results

on Jul 22, 2021
  • Abbott shares pulled back 1.22% on Thursday despite announcing better than expected Q2 results.
  • The company reported Q2 non-GAAP EPS of $1.17, beating the consensus Street estimate of $1.02.
  • Abbott’s revenue grew by 39.4% to $10.22 billion, $550 million better than the average analyst forecast.

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The US medical devices company Abbott Laboratories (NYSE:ABT) announced its fiscal Q2 results on Thursday before markets opened. The company posted higher than expected revenue of $10.22 billion, beating the consensus Street estimate by $550 million. ABT’s earnings per share also outperformed the expectation of $1.02 with $1.17.

However, Abbott reported a significant fall in sales from covid-related operations, with molecular diagnostics sales down 23.1% organically amid falling covid testing demand. The company reported $1.3 billion in covid-testing sales, down 41% from the fiscal first quarter.

Abbott’s overall global sales posted organic growth of 11% compared with pre-pandemic levels.

The company issued diluted GAAP earnings per share guidance of $2.75 to $2.95 for 2021. In addition, it expects to post diluted non-GAAP earnings per share of $4.30 to $4.50 compared to a consensus Street estimate of $4.36.

Should you invest in Abbott shares in Q3 2021?

Abbott Labs shares trade at a trailing P/E ratio of 37.05, indicating a fair valuation. However, ABT’s forward P/E ratio of 25.66 potentially undervalues the stock, making it attractive to investors looking to buy long term.

Analysts expect Abbott’s earnings per share to grow by 24.5% this year and at an average of 12.84% over the next five years. Therefore, ABT shares could also be attractive to growth investors.

Abbot shares are up 7.73% this year and 17.32% over the last 12 months, leaving a lot of room for growth. It could be time to add this medical technology company to your portfolio.

Source – TradingView

Technical overview: Abbott Labs stock price predictions for Q3 2021

Technically, Abbott shares appear to be trading within an ascending channel formation in the daily chart. However, the stock price pulled back on Thursday to find support from the 100-day moving average.

Although ABT shares are up more than 11% since the start of June, the stock price is yet to hit overbought conditions, leaving more room for upward movement.

Therefore, investors can target gains at approximately $119.71 and $122.48. The support levels are $114.96 and $111.85. ABT stock traded at $117.19 at the time of writing.

Bottom line: the case for buying current ABT bull run

In summary, Abbott trades at an attractive forward P/E ratio, making it ideal for value investors. In addition, its 5-year earnings projection of about 12.84% per year attracts growth investors, while the current bull run still seems to have momentum. Therefore, Thursday’s slight pullback could be an opportunity to buy ABT stock.