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Abbott Laboratories (ABT 1.86%) concocted a stock market win on Tuesday, with its shares rising nearly 2% on the day against the S&P 500‘s 0.7% gain. That followed an analyst’s inclusion of the company on a top-shelf list of stock picks for next year.
Before market open, Cowen prognosticator Joshua Jennings tapped Abbott as a Best Idea for 2023. In doing so, he reiterated his outperform (buy, in other words) recommendation on the stock and $130 per share price target.
Jennings’ rosy view on Abbott is based on the consensus estimates for 2023.
He pointed out in his latest research note that the average analyst estimate for that year’s profitability has dropped 15% across 2022 (to the current $4.41). According to him, this is due to “above average” macroeconomic difficulties and challenges arising from foreign exchange for the global company. Jennings added that a steep decline in sales of COVID-19 testing kits has contributed to the lowered expectations.
“We view $4.41 as a beatable number, and we expect ABT to be rewarded as it enters a post-pandemic era of solid growth with far less exposure to COVID test sales,” the analyst concluded.
Abbott has been on a bullish upward trajectory over the past few days, not least because it declared a dividend raise on Friday. While this was entirely in character for the company — it’s a Dividend King, after all — the lift was quite generous, at nearly 9% over the current payout. This indicates that its underlying business is robust, and it is confident it can continue to perform well going forward.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool has a disclosure policy.
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