COMPANY DESCRIPTION

bbott Laboratories (Abbott or 'the company') is a global, broad-based healthcare company withcommercial interests spanning branded generics, diagnostic, vascular, and nutritional markets.Thecompany has shaped much of its recent corporate development through acquisitions, which hashelped it diversify its portfolio and expand its reach. Intensifying competition, however, may have anegative impact on its market share.A

 

ECONOMIC MOAT

In our opinion Abbott's  moat is evidenced by ABT being one of a handfull of competitors (oligopoly) that dominate the markets in nutritionals, glucose monitors, coronary stents, and immunoassays.  ABT built its moat by efficient scale and intellectual property.

 

OUTLOOK

We believe that Abbott is well positioned to deliver solid growth on both its top and bottom lines over the next 3 to 5 years. Demand trends are holding up well in most of the core businesses and geographies, and we are particularly encouraged with the company's fast-growing presence in emerging markets 

 

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STRENGTHS

  • Split enabled Abbott and AbbVie to actively optimize their portfolios

  • Acquisitions strengthened Abbott's hold in a variety of healthcare segments andterritories

  • Broad portfolio of healthcare products ensuring well-balanced revenue flow

WEAKNESSES

  • Significant level of indebtedness may affectthe company’s financial flexibility

  • Product recalls hampering the company'sreputation

OPPORTUNITIES

  • Acquisition of OptiMedica may contributeto Abbott’s growth in cataract market increasing acceptance of launched productsin major market

  • Collaboration with Janssen and Pharmacyclics could help Abbott developtest to diagnose leukemia

  • Favorable demographic trends likely to spur demand for Abbott's products

THREATS

  • Healthcare reform in the US could negatively impact the company's profitability

  • Sluggish economic recovery and sovereign debt crisis

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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