The firm maintained its $48 price target on the stock.
The stock's recent rally has balanced its risks and rewards, Goldman Sachs said in a note.
Given consolidation within the industry, the firm now views more favorable upside elsewhere within its coverage.
Capital allocation is needed for Abbott stock to reach its bullish estimates, as Goldman Sachs no longer sees an upside to consensus earnings estimates.
"To be clear, this is not a negative call on Abbott's business or emerging markets (EM) but rather a shift in our industry view to focus on stocks with more bottoms-up growth drivers (new product cycles) rather than making a top-down call (i.e. strength in EM healthcare spending)," the firm said in a note.
Based in Abbott Park, IL, Abbott is engaged in the discovery, development, manufacture and sale of a range of health care products.
Shares of the company are gaining by 0.02% to $44.20 in mid-morning trading on Friday.
Separately, TheStreet Ratings team rates ABBOTT LABORATORIES as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate ABBOTT LABORATORIES (ABT) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, increase in stock price during the past year, impressive record of earnings per share growth and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Equipment & Supplies industry average. The net income increased by 8.6% when compared to the same quarter one year prior, going from $537.00 million to $583.00 million.
- The revenue growth significantly trails the industry average of 37.3%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- After a year of stock price fluctuations, the net result is that ABT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- ABBOTT LABORATORIES has improved earnings per share by 34.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ABBOTT LABORATORIES reported lower earnings of $1.12 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $1.12).
- The gross profit margin for ABBOTT LABORATORIES is rather high; currently it is at 54.60%. Regardless of ABT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ABT's net profit margin of 11.32% compares favorably to the industry average.
- You can view the full analysis from the report here: ABT