Abbott Laboratories
ABT
$110.91
+1.08%
Abbott Laboratories is a diversified healthcare company that develops and markets medical devices, diagnostics, nutritional products, and branded generic pharmaceuticals, operating across more than 160 countries. As a global leader in medical devices and diagnostics, Abbott holds strong positions in cardiovascular devices, continuous glucose monitoring (CGM), and point-of-care testing, with roughly 60% of sales coming from outside the U.S. The current investor narrative centers on the company's recovery from a challenging 2025-2026 period marked by a guidance cut and a significant stock drawdown, while investors debate the sustainability of its growth in medical devices and diagnostics, the impact of its strategic acquisition of Exact Sciences, and its ability to maintain its 54-year dividend growth streak amid near-term headwinds.…
ABT
Abbott Laboratories
$110.91
Related headlines
Investment Opinion: Should I buy ABT Today?
We rate ABT a Hold, as the stock offers a reasonable forward valuation and a strong dividend, but near-term earnings headwinds and integration risks temper upside. The analyst consensus is Buy with a 9.8% upside to the average target, but the recent guidance cut warrants caution.
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ABT 12-Month Price Forecast
The AI model assesses ABT as neutral with medium confidence. The forward valuation is attractive, but the recent earnings decline and guidance cut create uncertainty. The stock's recovery depends on margin stabilization and successful integration of Exact Sciences. If Q2 earnings show improvement, the stance would upgrade to bullish; if margins deteriorate further, it would downgrade to bearish.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Abbott Laboratories's 12-month outlook, with a consensus price target around $118.42 and implied upside of +6.8% versus the current price.
Average Target
$118.42
0 analysts
Implied Upside
+6.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$103 - $135
Analyst target range
Abbott is covered by 24 analysts, with a consensus recommendation of 'Buy' (mean rating of 1.67 on a scale where 1 is Strong Buy and 5 is Sell). The average target price is $118.42, implying an upside of 9.8% from the current price of $107.81. The distribution of ratings is not provided, but the mean rating suggests a bullish tilt. Recent institutional ratings from firms like Evercore ISI, Piper Sandler, and BTIG have all been positive (Outperform, Overweight, Buy), indicating that analysts remain optimistic despite the recent guidance cut. The target price range is $103.00 to $135.00, with the low target implying a downside of 4.5% and the high target implying an upside of 25.2%. The wide spread of $32 suggests significant uncertainty about Abbott's future performance, likely due to the ongoing recovery in medical devices and the integration of Exact Sciences. The high target assumes successful execution of growth initiatives and margin expansion, while the low target reflects concerns about competitive pressures and potential regulatory issues. Overall, the analyst community is cautiously optimistic, with a consensus that the stock is undervalued at current levels.
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Bulls vs Bears: ABT Investment Factors
Abbott presents a mixed picture: solid revenue growth and a discounted forward valuation are offset by a recent guidance cut and earnings decline. The bull case rests on the recovery of medical devices and diagnostics, while the bear case highlights margin pressure and integration risks. Currently, the bearish evidence is stronger due to the guidance cut and underperformance, but the forward PE suggests the market expects a rebound. The key tension is whether Abbott can restore earnings growth to justify its valuation, with the Exact Sciences integration and CGM momentum being pivotal.
Bullish
- Strong Q1 2026 Revenue Growth: Q1 2026 revenue of $11.16B grew 7.8% YoY, driven by Medical Devices ($5.54B) and Diagnostics ($6.2B). This demonstrates broad-based demand across core segments, supporting the company's recovery narrative.
- Forward PE at Discount to Peers: With a forward PE of 17.78x versus the industry average of ~25x, Abbott trades at a significant discount on expected earnings. This implies the market is pricing in a strong earnings recovery, offering upside if execution improves.
- Analyst Consensus Buy with 9.8% Upside: 24 analysts rate ABT a Buy (mean 1.67), with an average target of $118.42, implying 9.8% upside from $107.81. Recent ratings from Evercore, Piper Sandler, and BTIG are positive, reflecting confidence in the growth strategy.
- 54-Year Dividend Growth Streak: Abbott has increased dividends for 54 consecutive years, with a payout ratio of 63% and a yield of 1.88%. This long track record provides income stability and signals management's commitment to shareholder returns.
Bearish
- Guidance Cut and Earnings Decline: In April 2026, Abbott cut its 2026 profit outlook, overshadowing a Q1 earnings beat. This led to a sharp stock decline, with EPS dropping from $1.02 in Q4 2025 to $0.62 in Q1 2026, reflecting near-term margin pressure.
- Stock Underperforming S&P 500: ABT is down 18.36% over the past year while the S&P 500 gained 22.3%. The stock sits at 38.6% of its 52-week range, indicating persistent selling pressure and negative relative strength (-40.66% 1Y).
- High Trailing PE and Negative PEG: The trailing PE of 33.5x is above the industry average of 25x, and the PEG ratio is -0.65, indicating expected earnings decline. This suggests the stock is not cheap on current earnings, and growth must accelerate to justify valuation.
- Diagnostics Normalization Post-Pandemic: The diagnostics segment, which surged during COVID, is now normalizing. Q1 2026 diagnostics revenue of $6.2B may face tough comparables, potentially slowing overall growth and pressuring margins.
ABT Technical Analysis
Abbott's stock has been in a pronounced downtrend over the past year, with a 1-year price change of -18.36%, significantly underperforming the S&P 500's +22.3% gain. The current price of $107.81 sits at 38.6% of its 52-week range (between $81.97 low and $137.49 high), indicating the stock is closer to the lower end of its range, which often suggests either a value opportunity or a falling knife. The 52-week low was set in May 2026, and while the stock has rebounded from that level, it remains well below its 52-week high, reflecting persistent selling pressure over the past year.
Beta
0.58
0.58x market volatility
Max Drawdown
-39.6%
Largest decline past year
52-Week Range
$82-$137
Price range past year
Annual Return
-15.3%
Cumulative gain past year
| Period | ABT Return | S&P 500 |
|---|---|---|
| 1m | +20.4% | +3.1% |
| 3m | +30.6% | +3.3% |
| 6m | -1.6% | +13.3% |
| 1y | -15.3% | +20.2% |
| ytd | -10.7% | +13.3% |
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ABT Fundamental Analysis
Abbott's revenue growth has been solid but decelerating. In Q1 2026, revenue was $11.16 billion, up 7.8% year-over-year, compared to Q1 2025's $10.36 billion. However, sequential growth has slowed, with Q4 2025 revenue at $11.46 billion and Q3 2025 at $11.37 billion, indicating a plateau. The company's revenue segments show Medical Devices as the largest driver at $5.54 billion, followed by Diagnostics at $6.2 billion, Nutritional Products at $2.02 billion, and Established Pharmaceuticals at $1.43 billion. The growth is broad-based, but the diagnostics segment, which surged during the pandemic, is now normalizing, while medical devices, particularly CGM, are expected to drive future growth.
Quarterly Revenue
$11.2B
2026-03
Revenue YoY Growth
+7.8%
YoY Comparison
Gross Margin
56.3%
Latest Quarter
Free Cash Flow
$7.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ABT Overvalued?
Given that Abbott's net income is positive, the PE ratio is the primary valuation metric. The trailing PE is 33.5x, while the forward PE is 17.78x, implying the market expects significant earnings growth. This gap suggests that the market is pricing in a strong recovery in earnings, likely driven by margin expansion and cost controls. The PEG ratio is negative at -0.65, which is unusual and indicates that earnings are expected to decline in the near term, possibly due to the guidance cut. Compared to the industry average, Abbott's trailing PE of 33.5x is at a premium to the medical devices sector average of around 25x, but the forward PE of 17.78x is at a discount, suggesting that the market is already pricing in a recovery. Historically, Abbott's PE has ranged from 21x to 46x over the past five years, with the current trailing PE of 33.5x near the middle of that range, while the forward PE is near the lower end, indicating that the stock is not expensive on a forward basis.
PE
33.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 21x~47x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a high trailing PE of 33.5x and a negative PEG of -0.65, indicating expected earnings decline. The payout ratio of 63% limits dividend growth flexibility, and debt-to-equity of 0.29 is manageable but could rise with the Exact Sciences acquisition. Free cash flow of $7.38B TTM provides some cushion, but margin compression (operating margin 18.2% in Q1 2026 vs. 19.6% in Q4 2025) could pressure earnings further.
FAQ
Key risks include: 1) Financial: high payout ratio (63%) and negative PEG (-0.65) indicate earnings decline risk. 2) Competitive: CGM market share loss to Dexcom could hurt growth. 3) Macro: healthcare sector rotation and regulatory changes. 4) Company-specific: integration risks from Exact Sciences and potential dividend cut. The most severe risk is a prolonged earnings downturn, which could lead to a -24% decline to the 52-week low.
The 12-month forecast is mixed: a 25% chance of a bull case reaching $118-135, a 50% chance of a base case at $108-118, and a 25% chance of a bear case falling to $82-103. The base case is most likely, assuming steady growth and successful integration. The average analyst target is $118.42, implying 9.8% upside. Investors should watch Q2 earnings for confirmation.
On a trailing basis, ABT is overvalued with a PE of 33.5x, above the industry average of 25x. However, on a forward basis, it is undervalued with a PE of 17.78x, implying the market expects significant earnings growth. The PS ratio of 4.94x is in line with peers. The market is pricing in a recovery, but if earnings fail to improve, the stock could be overvalued. Overall, it is fairly valued on forward earnings but expensive on current earnings.
ABT offers a reasonable forward valuation (17.78x PE) and a 1.88% dividend yield, but the recent guidance cut and earnings decline introduce risk. With a 9.8% upside to the average analyst target, it could be a good buy for long-term investors willing to tolerate near-term volatility. However, for those seeking immediate growth, other healthcare names may offer better prospects. The stock is a 'Hold' for most, but a 'Buy' for income-focused investors with a 3-5 year horizon.
ABT is better suited for long-term investment due to its stable dividend, low beta (0.58), and defensive healthcare exposure. Short-term trading is risky given the stock's volatility and recent downtrend. A minimum holding period of 3-5 years is recommended to ride out near-term headwinds and benefit from the Exact Sciences acquisition and CGM growth. Income investors will appreciate the 1.88% yield and 54-year dividend growth streak.
