ABT – Market expectations are for continued Uniform ROA expansion, and management is confident about their EPS guidance, COVID-19 testing capacity, and new product launches

March 10, 2021

  • Abbott Laboratories (ABT:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 21.9x Uniform P/E. At these levels, the market has bullish expectations for the firm, and management is confident about meeting their 2021 EPS guidance, their COVID-19 testing capacity, and their new EPD and Nutrition product launches
  • Specifically, management is confident they can meet their $5 EPS guidance in 2021, sustain COVID-19 testing in 2022, and maintain a strong balance sheet going forward. Moreover, they are confident their new lateral flow tests can identify infectious people and they have the capacity conduct over 50 million tests per month. They are also confident the pandemic has accelerated digital transformation and that their new cardiac rhythm defibrillation products are capable of offering remote monitoring and digitally connected care. Furthermore, they are confident new Established Pharmaceuticals Division (EPD) and Nutrition division product launches can drive the needed returns for those businesses, that they continue to build Alinity’s test menu, and that the new Neuromodulation platform will change how patients get the results of their outcomes