Barclays Maintains an 'Overweight' on Abbott Labs (ABT); New Pharma Business Outlook - Thriving Biotech or Pharma with Expiry Risk?

Barclays maintains an 'Overweight' on Abbott Labs (NYSE: ABT) price target of $55.00.

Barclays analyst says, "Post Investor Meeting analysis - Valuation close to large-cap, dividend-paying biotech: After attending the New York Investor meeting this morning, we model the pharma business' top line through FY20 assuming 100% pipeline delivery versus 50%. We assume Humira peaks at $10B in 2016 then declines to $7B by FY20. Preliminary analysis yields that the New Pharma business would be largely flat for the next decade assuming all pipeline assets deliver ($18B in FY20). Should only half be successful, the top line could fall to $15B in FY20 (FY11-20E CAGR of -2%). In Figure 1 & 2, we compare our projections against pharmas and large cap biotechs and we conclude that based on top-line growth that the New Pharma Business is most similar to a large-cap dividend-paying biotech (10 - 11x P/E). Hence, our SOTP valuations yield $56 to $62 for the entire enterprise (including Medical Products)."

For more ratings news on Abbott Labs click here and for the rating history of Abbott Labs click here.

Shares of Abbott Labs closed at $53.86 yesterday.

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