Abbott Laboratories’ ABT strong sales recovery within the Nutrition business, driven by the robust sales performance of Ensure, is poised to drive growth in the upcoming quarters. The company is driving solid growth in emerging markets within the EPD business. Within Diabetes Care, ABT is driving robust growth through its flagship, sensor-based CGM system — FreeStyle Libre. However, currency fluctuations may restrict Abbott’s growth potential.

In the past year, this Zacks Rank #2 (Buy) company’s shares have risen 19.6% compared with the industry’s 9.1% growth and the S&P 500 composite’s 5.4% increase.

The leading at-home healthcare company has a market capitalization of $228.81 billion. Abbott beat on earnings in each of the trailing four quarters, delivering an average surprise of 1.64%.

ABT’s Tailwinds

EPD Set for Sustainable Growth: Abbott’s EPD is well-positioned for sustained growth in emerging pharmaceutical markets, leveraging the successful execution of its Branded Generic operating model. The company continues to sustain its long-standing track record of delivering strong growth, which includes a five-year compound annual growth rate (CAGR) of 8% for EPD.

Abbott’s EPD sales in the fourth quarter of 2024 increased 8.5% organically. Growth was well-balanced across markets and therapeutic areas, including gastroenterology, women's health, central nervous system and pain management.

Libre Drives Diabetes Care: Abbott’s Diabetes Care business continued to benefit from the growing sales of its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. In a relatively short span, FreeStyle Libre has achieved global leadership among continuous glucose monitoring (CGM) systems for both Type 1 and Type 2 users.

Recently, the company has been gaining momentum, leveraging consistent upgrades to the FreeStyle Libre. Earlier in 2024, Abbott obtained FDA approvals for two new over-the-counter CGM systems called Lingo and Libre Rio, which are based on Libre’s technology, now used by more than 6 million people around the world. This over-the-counter availability of CGM marks the initiation of a new era in the United States for Abbott.

In the fourth quarter, sales of CGM exceeded $1.8 billion and grew 23% in Diabetes Care. For full-year 2024, sales of CGM totaled approximately $6.5 billion, up 22% from the 2023 level. This included growth of 27% in the United States.

Sales Recovery Within Nutrition: Abbott’s Nutrition business has consistently demonstrated strong growth and market share gains. Despite some ongoing softness in a few international markets for pediatric products, the overall Nutrition business is expanding on strong global demand for the company’s adult nutrition products, which offer a combination of high protein and low sugar to help people optimize their health and wellness.

In the fourth quarter of 2024, the company reported 7.1% organic growth within this business, backed by 11.4% growth in Adult Nutrition. This was led by strong sales of Ensure, ABT’s complete and balanced nutrition brand, and Glucerna, for people with diabetes. International adult nutrition registered 9.5% growth.

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ABT’s Headwind

Foreign Exchange Translation Affects Sales: Foreign exchange is a major headwind for Abbott due to a considerable percentage of its revenues coming from outside the United States. The strengthening of the euro and other developed market currencies has consistently hampered the company’s performance in international markets. In the fourth quarter of 2024, foreign exchange had an unfavorable year-over-year impact of 1.4% on sales.

Abbott’s Estimate Trend

The Zacks Consensus Estimate for 2025 earnings per share has remained unchanged at $5.15 in the past 30 days.

The Zacks Consensus Estimate for 2025 revenues is pegged at $44.35 billion, indicating a 5.7% rise from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cardinal Health CAH.

Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 62.2% compared with the industry’s 17.2%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.06%. The company’s shares have surged 73.5% compared with the industry’s 9.5% growth in the past year.

PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Scientific, carrying a Zacks Rank #2 at present, has an earnings yield of 2.7% compared with the industry’s 1.5%. Shares of the company have rallied 47.1% compared with the industry’s 9.5% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.5%. Shares of the company have rallied 17.5% against the industry’s 3.2% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.64%.

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