On June 1, Abbott Laboratories (NYSE:ABT) updated its guidance for the year, and investors weren’t impressed. The company stated that it was providing an update because of “significantly lower recent and projected COVID-19 diagnostic testing demand.” Now that vaccination numbers are rising and there are fewer cases of COVID-19, demand is particularly soft demand for its rapid tests.
Abbott is now projecting diluted earnings per share (EPS) from continuing operations to fall within a range of $2.75 to $2.95 for 2021. Back in April, when it released its first-quarter results, the company was expecting diluted EPS to be “at least” 3.74.
However, even with the reduction in forecast, that would still come in higher than the diluted EPS it reported last year which totaled $2.50, which was already a 21% improvement from the $2.06 it posted the year before. But for investors looking for much more growth, it has cooled the excitement surrounding the stock.
Abbott’s shares would fall to below $106 on the day — the lowest that they’ve closed at since end of October. The company is a big name in COVID-19 testing and that has been a key reason why the stock has been performing well. In one year, its shares are up 19% with the recent dip in price but prior to that they were up around 30%.
The stock remains a good long-term buy and its dividend of 1.7% provides a decent payout for income investors as well. Now may be a good time to consider adding some shares of Abbott to you portfolio.