Market Update (NYSE:ABT): Abbott to buy St. Jude for $25 billion to boost heart devices

[Reuters] – Analysts questioned the cost of the deal versus its financial benefits, and how it would affect Abbott’s purchase of diagnostics company Alere Inc (ALR.N), which the U.S. government is investigating for its sales practices. Abbott Chief Executive Officer Miles White defended the St. Jude deal, saying it would add to earnings per share in the first full year after it closes. St. Jude shareholders will receive $46.75 in cash and 0.8708 in stock, or about $85 per share. Read more on this. Abbott Laboratories (ABT) , currently valued at $61.15B, began trading this morning at $40.08. Looking at the equity, the company’s one day range is $39.99 to $41.55 with a one year range of $36.00 to $51.74. ABT shares are currently priced at 19.92x this year’s forecasted earnings, which makes them relatively expensive compared to the industry’s -6.63x forward p/e ratio. And for income investors, the company pays shareholders $1.04 per share annually in dividends, yielding 2.36%. According to a consensus of 17 analysts, the earnings estimate of $0.53 per share would be $0.01 better than the year-ago quarter and a $0.01 sequential decrease. The full-year EPS estimate is $2.20 which would be a $0.05 better than last year’s full-year earnings. The quarterly earnings estimate is predicated on a consensus revenue forecast of $5.23 Billion. If reported, that would be a 1.16% increase over the year-ago quarter. In terms of ratings, Morgan Stanley downgraded ABT from Overweight to Equal-Weight (Jan 4, 2016). Previously, Goldman downgraded ABT from Buy to Neutral. The average price target for ABT shares is $47.20, which is 17.76% above where the stock opened this morning. See more in (NYSE:ABT) Similar Articles: Company Update: Abbott Laboratories (NYSE:ABT) – Abbott Reports First-Quarter 2016 Results Company Update: Abbott Laboratories (NYSE:ABT) – Abbott Declares 369th Consecutive Quarterly Dividend Market Update: Abbott Laboratories (NYSE:ABT) – Abbott Labs to buy diagnostics company Alere for $5.8 bln
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