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Behind Abbott’s Recent Analyst Recommendation and Rating Upgrades

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ABT’s analyst recommendations

Abbott Laboratories (ABT) announced the FDA (US Food and Drug Administration) approval of its Freestyle Libre on September 27, 2017, and some analysts have updated their recommendations on the stock since the development.

ABT stock has gained 2% since the announcement, and the Health Care Select Sector SPDR ETF (XLV) rose on the day of the announcement. ABT makes up ~2.6% of XLV’s total holdings.

As of September 29, 2017, of the 20 investment firms covered in the latest Reuters survey, ~65% have given a “buy” rating on ABT stock, while ~35.0% have given a “hold” rating. No analyst has given a “sell” rating.

ABT’s 12-month target price is now $55.53 per share, implying a return potential of ~3.5% over the next year, based on the stock’s closing price of $53.64 on September 28, 2017.

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Target prices and revised recommendations

ABT’s maximum return potential over the next 12 months is estimated to be ~8.1%, as the company’s highest target price over the next 12 months stands at $58 per share. The maximum downside risk in the stock over the next 12 months stands at around -12.4%, based on the stock’s lowest target price of $47.

After the announcement of its Freestyle Libre FDA approval on September 27, 2017, Barclays and Wells Fargo increased their price targets on ABT stock. On September 1, 2017, BMO Capital reiterated its “hold” rating on ABT stock, providing a target price of $53 per share.

As of September 29, 2017, peers Stryker (SYK), Edwards Lifesciences (EW), and Boston Scientific (BSX) have average broker target prices of $152.1, $130.8, and $31, respectively. These prices represent one-year returns of 8.4%, 20.1%, and 7.9%, respectively.

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