ABT – Market expectations are for Uniform ROA expansion, but management has concerns about guidance, Nutrition, and growth

• Abbott Laboratories (ABT:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 24.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, however management has concerns about guidance, their Nutrition business, and future growth
• Specifically, management may be concerned about the strength of their position in Structural Heart and about their progress in launching Alinity instruments for testing in Europe. Furthermore, they may lack confidence in their ability to meet their earnings growth guidance, and they may lack confidence in their ability to sustain recent top line growth rates. Moreover, management may be concerned about their ability to continue innovating in their Nutrition business, and they may lack confidence in their ability to sustain recent growth rates in Nutrition and Core Lab Diagnostics. Finally, they may be concerned about their ability to meet their Medical Devices growth targets and about the impact of FX on their profitability.