Analysts Say Sell Healthcare Stocks ABT and HOLX for '19

This marks the first "sell" rating on ABT stock

Jan 2, 2019 at 10:05 AM
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In our Opening View newsletter today, we noted the high number of analyst notes that have come out this morning, not surprising given the turn of the calendar year. Two stocks that analysts are bearish on going forward are healthcare names Abbott Laboratories (NYSE:ABT) and Hologic, Inc. (NASDAQ:HOLX). Below is a brief look at how brokerages are positioning themselves on ABT and HOLX shares.

A few different brokerage firms actually weighed in on Abbott Laboratories this morning. Morgan Stanley was the only bull among them, lifting its price target to $85 from $82, while Evercore ISI trimmed its price target to $76 from $77. However, it's likely a downgrade to "sell" from "neutral" at Citigroup that's weighing on ABT, with the firm also dropping its target price to $68 from $72, saying it expects slower sales growth in the coming years.

"Sell" ratings in general are rare on Wall Street, but this one is especially noteworthy given ABT's sharp two-year rise on the charts, culminating in a Dec. 3 record high of $74.92. After finding support near the 200-day moving average a few sessions back, the shares went on to close higher in four straight sessions, though they're down 3.4% today at $69.83. Looking at the overall analyst setup on the equity, 16 of the 18 in coverage recommended buying it coming into today.

HOLX shares, meanwhile, are trading down 5.1% at $39, after Morgan Stanley cut its outlook to "underweight" from "equal-weight," while lowering its price target to $39 from $44. Morgan Stanley cited a number of issues facing the women's health expert, including lingering problems around its Cynosure and surgical segments, as well as potential competition from Channel Medsystem's Cerene device.

Hologic had a much more volatile 2018 than sector peer ABT, bottoming at $35.10 back in May and notching a high of $45.17 on Dec. 4. The shares had been battling back since bottoming near the $37.50 level last month, but topped out near their 50-day moving average on Monday. Meanwhile, the majority of analysts have just "hold" recommendations on the security, though there are seven "strong buy" or "buy" endorsements, as well.

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