Abbott‘s (ABT Quick QuoteABT – Free Report) is set to get a lot of attention following the company’s recent deal with Real Madrid Football Club. The company announced that it has signed a three-year contract to partner with Real Madrid football club in health sciences and nutrition. The company is also a global partner of the Real Madrid Foundation, an organization founded by the club that works to promote the values of sport among children around the world.
The financial terms of the transaction were not disclosed.
During this difficult time, malnutrition is becoming a major socio-economic problem around the world. According to Abbott, malnutrition affects 1 in 3 people of all ages, regions, and socioeconomic classes. In such a situation, it is expected that partnering with a global influencer like Real Madrid (this sports club is supported by more than 600 million fans worldwide) will shift the focus of youth towards better nutrition and healthy living.
Abbott said the partnership will support education, sports and social welfare activities for children at risk in 80 countries. It will also provide nutritional support for the first men and women and academy teams, as well as for innovation and new product development.
More on the news
Abbott, with its focus on improving nutrition through innovation, recently founded the Abbott Center for Malnutrition Solutions. This center aims to reduce malnutrition worldwide over the next 10 years. As part of the latest partnership, Abbott will work with the Real Madrid Foundation Social Sports Schools worldwide to help children at risk.
This work will contribute to the goal of Abbott’s Sustainability Plan 2030 to transform the way we care for malnutrition, chronic diseases and infectious diseases. Their goal is to improve the lives of over 3 billion people by the end of the decade.
The partnership runs until the end of the 2023-2024 football season. It will also support the nutritional needs of the Real Madrid Foundation clinics, which operate in 42 countries. Abbott also indicated that as a partner in health sciences and nutrition, it will work with the club to research new ingredients and product innovations. It will also work for the nutritional support of Real Madrid’s first men’s, women’s and academy teams.
Current scenario within Abbott’s nutrition business
Within Abbott’s Nutrition division, Abbott grew its adult nutrition sales from the start of the pandemic through the second quarter of 2021. The company is expected to continue to see outstanding growth in the US and internationally in the third quarter of its products Remember (branded complete and balanced nutrition for adults) and Glucerna (branded diabetic nutrition). According to the company, the two factors driving the growth rate of adult nutrition are the new users entering the category and the increase in usage by existing customers during that period.
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However, in the pediatric nutrition space, the company saw a significant delay in sales from the start of the pandemic through April 2021. We note that pediatric health care took a back seat during these months as the earlier variants of COVID-19 did not affect children’s health at all. Nonetheless, sales improved in the second quarter due to strong demand for Pedialyte, Abbott’s global rehydration brand, driven by increased investment in direct consumer advertising. With a number of research studies suggesting that the new variants of COVID-19 are likely to affect the health of children (the still unvaccinated group of the world’s population), this upward trend in pediatric nutrition is likely to have continued into the third quarter.
Value for money
The company’s shares are up 6.7% in a year while the industry is down 0.2%.
Zack’s rank and key picks
Abbott currently holds a # 3 Zacks rank (Hold).
A few better valued stocks from the broader medical field are Alcon Inc (ALC quick offerALC – Free report), West Pharmaceutical Services, Inc. (WST quick offerWST – Free report) and Henry Schein, Inc. (HSIC Quick QuoteHSIC – Free report), each with a Zacks rank # 2 (Buy). You can see the full list of Zacks # 1 ranked (Strong Buy) stocks here.
Alcon has an estimated long-term earnings growth rate of 18%.
West Pharmaceutical Services has an estimated long-term earnings growth rate of 27%.
Henry Schein has a projected long-term earnings growth rate of 14%.