UPDATE: Abbott Labs (ABT) PT Lowered to $126 at Morgan Stanley as COVID Void Comes Sooner Than Expected

Morgan Stanley analyst Cecilia Furlong lowered the price target on Abbott Labs (NYSE: ABT) to $126.00 (from $140.00) after Abbott lowered 2021 COVID-19 Dx outlook to $4.0-4.5bn in 2021 from $6.5-7.0bn previously, driven by several factors including (1) significant reductions in COVID-19 cases particularly in the US, (2) continued rollout of vaccines globally, and (3) changes in US health authority guidelines related to COVID-19 testing for fully vaccinated individuals.

The analyst reiterated an Overweight rating, stating "Abbott's prior double-digit EPS outlook for 2022 provided more insulation vs. testing peers on receding COVID case rate pressure, but with COVID-19 Dx expectations reset, we see the current price now reflecting the base business and pipeline opportunity. While the guide down represented a significant departure from recent messaging and outlook, COVID-19 Dx testing was not a key tenet of our underlying investment thesis. We continue to see material reinvestment as a likely road for Abbott to sustain, or more likely accelerate, the 2023-2025 top-line growth outlook, notwithstanding reduced COVID-19 Dx revenue streams."

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