Boston, MA 08/05/2014 (wallstreetpr) – Investment advisor Goldman Sachs Group Inc (NYSE:GS) has boosted its price objective on the shares of healthcare products maker Abbott Laboratories (NYSE:ABT) based on normalized earnings per share and discounted cash flow estimation. However, it had not changed its rating on the stock. It also expects the company to benefit from its recent tactical activities to accelerate its growth pace.
Price Tag
Goldman Sachs Group Inc (NYSE:GS) had boosted its 12-month price target to $49 from $47 on Abbott Laboratories shares, which meant that there is an upside potential of over 15% from the closing price of $42.39 on Monday. The target has been revised upwards based on 50/50 weight on the estimated earnings per share of 2015 compared to its earlier projection and discounted cash flow.
However, the brokerage had not made any changes in its rating of the stock and reiterated its rating of Buy.
Tactical Activities
Analyst David Roman also expects that the recent strategic activities of Abbott as very important factors to transform into one of the companies in the medical technology sector to witness fastest growth pace. He also sees the revenue synergies potential from the CFR acquisition, which does not have exposure in Mexico or Brazil markets where Abbott is strong with its solid distribution channels.
EPS Estimations Boosted
The analyst believes that cross-selling in these markets has the potential to boost the healthcare company’s growth pace in excess of 7% by the year 2017. He had revised upwards his estimation of earnings per share by 6 – 15 cents to $2.91 – $3.01 a share and 11 – 22 cents to $3.25 – $3.36 a share for the years 2016 and 2017 respectively. The projection includes intended DM EPD sale and assumptions.
Goldman Sachs Group Inc (NYSE:GS) also said that its three-pronged thesis, sum-of-the-parts, fundamental improvement, and M&A capacity has started to provide gains during the second quarter financial results.
