Abbott stock jumped Wednesday despite a mixed first-quarter report thanks to light sales of its Covid tests.
Sales at Abbott Laboratories' other segments, though, "were modestly better than the consensus view," Edward Jones analyst John Boylan said in a report. And, excluding the Covid tests — which Abbott doesn't see as a material part of its base business — sales grew 8.3% organically.
The health giant also reiterated its guidance for the year which Boylan sees as prudent given the "unpredictable global economic situation."
"Overall, we believe Abbott's positives balance the risks we see," he added.
Abbott stock advanced 2.8% to 129.70. Shares are forming a flat base with a buy point at 141.23. In a normal market, that entry would be a good time to consider adding Abbott shares. But in a risky environment like this, Investor's Business Daily recommends a market exposure of 0% to 20%.
Covid Tests Drag On Diagnostics
During the first quarter, Abbott earned an adjusted $1.09 per share, beating forecasts by two pennies and growing 11.2%. Sales climbed 4% on a strict, as-reported basis to $10.36 billion, but missed calls for $10.41 billion, according to FactSet.
Organically and including Covid tests, sales rose 6.9%. That lagged expectations, Evercore ISI analyst Vijay Kumar said in a client note.
He noted nutrition, medical devices and established pharmaceuticals — the latter of which Abbott sells outside the U.S. — topped projections by about $30 million to $50 million each. Diagnostics sales, which includes Covid tests, missed forecasts by roughly $140 million.
Abbott reiterated its guidance for adjusted earnings of $5.05 to $5.25 per share and for sales to grow 7.5% to 8.5% organically. The earnings guidance lined up with analysts' call for $5.15.
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