ABT Stock Notches Another Record High After Earnings

Options bulls are betting on even more upside for the healthcare concern

Assistant Editor
Apr 16, 2020 at 2:26 PM
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Abbott Laboratories (NYSE:ABT) is up 4.7% to trade at $95.20 -- recovering from its earlier dip -- following its first-quarter earnings report. The company reported profits of 65 cents per share and  revenue of $7.73 billion, beating Wall Street's estimates. Abbott also said a recent ramp up in coronavirus testing would help it weather through the current quarter.

Abbott's recent rally off its March 23, two-year lows is seemingly unstoppable. The equity is on track for its third consecutive all-time closing high, and is up more than 21% in April. For the year, ABT is up 10.4%. 

ABT apr 16

Evercore ISI reacted to the announcement with a price-target hike to $92 from $86. This optimism falls in line with the recent sentiment surrounding ABT, with 12 out of 15 analysts in coverage sporting a "strong buy" or "buy" rating, while the remaining three call it a tepid "hold." Furthermore, ABT has overtaken its 12-month consensus target price of $93.

Calls have been winning out in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 2.36 calls have been bought for every call in the past 10 weeks. This ratio sits in the 98th percentile of its annual range, suggesting the appetite for long calls is higher than usual.

Options players are circling ABT today, too, with 107,000 calls and 24,000 puts across the tape so far -- six times the intraday average. The two most popular are the April 95 and 100 call contracts, with positions being opened at both. This indicated these bulls are betting on even more upside for Abbott before these positions expire tomorrow evening. 

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