Abbott Laboratories

“Abbott trades at 14.6x forward earnings — cheap for a business generating $7-9B in annual FCF, expanding its CGM leadership into underpenetrated Type 2 diabetes globally, and carrying net debt of just $4.4B. The NEC infant formula litigation is a real but survivable financial burden given the balance sheet, not a business-model threat. FreeStyle Libre's installed-base flywheel and diagnostics reagent lock-in give Abbott a multi-decade compounding engine that the current price substantially undervalues. A two-tranche entry — initiate at current levels, add on weakness or NEC resolution — is the appropriate sizing approach.”