Key Takeaways:
- Abbott stock surged 14 percent, its largest single-day gain in 24 years.
- Q1 revenue hit $11.16 billion, with Medical Devices up 13.2 percent.
- The $21 billion Exact Sciences deal closed in March, adding cancer diagnostics.
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Abbott Labs surges 14% in biggest single-day gain since 2002
Abbott Laboratories surged 14 percent on Wednesday, its biggest single-day gain since 2002, after the medical device maker reported a Q1 earnings beat and closed its $21 billion acquisition of Exact Sciences.
"The quarter aligned with our expectations across all segments," Chief Executive Officer Robert Ford said in a statement.
Q1 revenue reached $11.16 billion, with Medical Devices climbing 13.2 percent to $5.54 billion. FreeStyle Libre generated $2.08 billion, up 13.8 percent. The company closed its $21 billion acquisition of Exact Sciences on March 23, adding Cologuard and Cancerguard cancer diagnostics to its portfolio. Abbott maintained its full-year adjusted EPS guidance of $5.38 to $5.58.
The rally adds roughly $25 billion to Abbott's market capitalization, partially reversing a 23 percent year-to-date decline driven by medtech sector weakness and concerns about Exact Sciences dilution, which Ford estimated at $0.20 per share. The broader market also gained Wednesday, with the S&P 500 rising 0.4 percent and the Nasdaq climbing 0.6 percent after a softer-than-expected June Producer Price Index report reinforced expectations that the Federal Reserve could hold rates steady.
Insider buying signaled confidence before the move. Chief Financial Officer Philip Boudreau purchased 11,109 shares on April 23 near $92, and Director Daniel Starks added 10,000 shares. Abbott has raised its dividend for 54 consecutive years.
The stock trades at 17 times forward earnings, below its five-year average of 22 times. Analysts target a consensus price of $116.72, implying about 20 percent upside from current levels.
The next test for Abbott is pipeline execution. FreeStyle Libre attach rates in Type 2 basal-insulin patients, supported by a 0.6 percent HbA1c reduction in the FreeDM2 trial, signal room for expansion. The company must also absorb the Exact Sciences integration while delivering within its $5.38 to $5.58 EPS range for the full year.
This article is for informational purposes only and does not constitute investment advice.
