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Investing.com - Mizuho (NYSE:MFG) has reduced its price target on Abbott Labs (NYSE:ABT) to $135.00 from $140.00 while maintaining a Neutral rating on the stock. The healthcare giant, currently trading at $120.51 with a market cap of $210 billion, shows signs of being oversold according to InvestingPro technical indicators.
The price target adjustment follows an 8% decline in Abbott shares, compared to a 0.5% gain in the S&P 500, after the company lowered its top-line guidance by 150 basis points on an organic basis due to COVID-related headwinds.
Abbott’s downward revenue revision stems from three main factors: a $100 million headwind from lower COVID-related sales in its Diagnostics segment, a $200 million headwind in China across its Core Lab segment linked to volume-based procurement pricing and lack of stimulus, and a $100 million headwind from USAID funding cuts for HIV testing.
These identified headwinds account for approximately 90 basis points of the guidance reduction, with Mizuho suggesting the remaining 60 basis points likely comes from other business areas, primarily the Nutritionals segment based on the quarter-over-quarter slowdown in U.S. Pediatrics.
Mizuho characterized the sell-off as "overdone" but noted that with bearish sentiment currently prevailing in the U.S. healthcare sector, any rebound in Abbott shares may be gradual. The stock’s historically low volatility (Beta: 0.73) and consistent dividend growth support this view. InvestingPro analysis reveals 8 additional key insights about Abbott’s current market position and future potential, available to subscribers.
In other recent news, Abbott Laboratories reported its second-quarter earnings for 2025, surpassing Wall Street expectations with an earnings per share (EPS) of $1.26, slightly above the consensus forecast of $1.25. Revenue reached $11.42 billion, exceeding the forecast of $11.07 billion, driven by strong sales in its core businesses. Despite these positive earnings, Abbott revised its full-year guidance to the lower end of its previous range due to challenges in its China diagnostics business, impacting sales growth in the Diagnostics segment. BTIG lowered its price target for Abbott to $145 from $148, citing these challenges but maintaining a Buy rating. Jefferies upgraded Abbott from Hold to Buy, raising its price target to $145, viewing recent stock pullbacks as an opportunity and considering Abbott’s valuation compelling. Evercore ISI also lowered its price target to $140 from $145, noting that Abbott exceeded expectations for its key products despite market concerns. Goldman Sachs maintained its Buy rating, highlighting that Abbott narrowed its earnings per share range while keeping the midpoint unchanged, despite revenue headwinds. These developments reflect ongoing adjustments and challenges within Abbott’s business segments, particularly in diagnostics, while maintaining a positive long-term outlook.
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