Abbott Benefits From Libre & Biosimilars Amid FX, Cost Headwinds

Abbott’s ABT diversified business portfolio is well-positioned to drive continued momentum in 2025. Foreign exchange remains a major headwind for Abbott. The stock currently carries a Zacks Rank #3 (Hold).Factors Driving ABT SharesAbbott continues to expand its Diagnostics business foothold (consisting of 20% of the total revenues in the first quarter of 2025). Over the past few quarters, the company has been witnessing increased global demand for routine diagnostic (excluding COVID-19 testing sales). Core Laboratory Diagnostics, excluding China, posted solid 6.5% growth in the first quarter of 2025, highlighting the underlying strength in routine diagnostics demand across global markets.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.Of late, the company has been gaining momentum, leveraging consistent upgrades of FreeStyle Libre. In 2024, Abbott obtained FDA approvals for two new over-the-counter CGMs called Lingo and Libre Rio, which are based on Libre’s technology. The technology is 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 for Abbott in the United States. In the first quarter, in Diabetes Care, sales of CGM exceeded $1.7 billion and grew 21.6%.Within its Established Pharmaceuticals Division (EPD) business, Abbott, leveraging its leading presence in emerging markets, enjoys a unique opportunity to scale a licensing model that is capital-efficient and can bring access to life-changing medicines to the emerging market population. Abbott’s EPD sales in the first quarter of 2025 increased 8% organically. Abbott’s strategic focus on biosimilars further strengthens its prospects, with the company now securing rights to 15 biosimilar products across key therapeutic areas. The recent agreement to commercialize four additional biosimilars across Asia, Latin America, the Middle East, and Africa positions Abbott to tap into the high-growth branded generic pharmaceutical market.Abbott Laboratories Price Abbott Laboratories price | Abbott Laboratories QuoteYear to date, shares of ABT have gained 18.6% compared with the industry’s 5.2% improvement. The company’s consistent efforts to expand in the high-growth areas, as well as its array of new product launches, are expected to help the stock continue its uptrend in the coming days.Concerns for AbbottForeign 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 some other developed market currencies has been hampering the company’s performance in the international markets. In the first quarter of 2025, foreign exchange had an unfavorable year-over-year impact of 2.8% on sales.The challenging macroeconomic scenario in the form of the ongoing complex geopolitical situation globally, specifically where Abbott operates, is driving a higher-than-anticipated increase in expenses in terms of raw materials and freight. This could also result in broader economic impacts and security concerns, affecting the company’s business in the upcoming months. Industrywide, it has been seen that the deteriorating global economic environment is reducing demand for several MedTech products, resulting in lower sales and lower product prices, while increasing the cost of goods and operating expenses of MedTech companies.In the first quarter, Abbott incurred a 3.4% increase in selling, general and administrative expenses.Key PicksSome better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Hims & Hers Health HIMS and Prestige Consumer Healthcare PBH. While Phibro Animal Health sports a Zacks Rank #1 (Strong Buy) at present, Hims & Hers Health and Prestige Consumer Health carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.Estimates for Phibro Animal Health’s fiscal 2025 earnings per share have jumped 3.6% to $2.01 in the past 30 days. Shares of the company have rallied 37.9% in the past year compared with the industry’s 10.1% growth. Its earnings yield of 8.7% compares comfortably with the industry’s 0.5% yield. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 30.6%.Hims & Hers Health shares have surged 172.5% in the past year. Estimates for the company’s 2025 earnings per share have jumped 12.5% to 72 cents in the past 30 days. HIMS’ earnings beat estimates twice in the trailing four quarters, matched in one and missed on another occasion, the average surprise being 19.6%. In the last reported quarter, it posted an earnings surprise of 66.7%.Estimates for Prestige Consumer Healthcare’s fiscal 2026 earnings per share have increased 1 cent to $4.77 in the past 30 days. Shares of the company have jumped 37.2% in the past year compared with the industry’s 10.1% growth. PBH’s earnings surpassed estimates in three of the trailing four quarters and matched on one occasion, the average surprise being 2.8%. In the last reported quarter, it delivered an earnings surprise of 1.5%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abbott Laboratories (ABT): Free Stock Analysis Report Prestige Consumer Healthcare Inc. (PBH): Free Stock Analysis Report Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report Hims & Hers Health, Inc. (HIMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks