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Investing.com - Evercore ISI lowered its price target on Abbott Laboratories (NYSE:ABT), a $208 billion healthcare giant with $42.3 billion in annual revenue, to $140.00 from $145.00 on Thursday, while maintaining an Outperform rating on the stock. According to InvestingPro data, Abbott currently trades at a P/E ratio of 15.7x.
The research firm noted that Abbott shares fell approximately 8% following the company’s second-quarter results, a reaction Evercore ISI characterized as "a bit harsh." The firm highlighted that Abbott exceeded expectations for its two key products—electrophysiology and Libre glucose monitoring systems—despite market concerns about slowdowns in these segments. InvestingPro analysis shows Abbott maintains a "GREAT" financial health score of 3.15, suggesting strong operational fundamentals.
Evercore ISI acknowledged that while Abbott’s organizational restructuring was "not ideal," approximately half of the organic growth reduction was attributed to one-time factors related to lower COVID-19 and USAID business. The core business experienced only about a 50 basis point organic cut.
Abbott management reiterated its double-digit EPS growth forecast for fiscal year 2025 despite these adjustments. The company also expressed confidence in meeting Street expectations of double-digit EPS growth for fiscal year 2026.
The revised $140 price target represents approximately 27 times price-to-earnings ratio, 21 times EBITDA, and a 3.6% free cash flow yield, which Evercore ISI noted is consistent with large-cap diversified tools companies. InvestingPro reveals Abbott has maintained dividend payments for 55 consecutive years, with a current yield of 1.79%. Get access to 8 more exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.
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. The company also reported revenue of $11.42 billion, exceeding the forecast of $11.07 billion, driven by strong sales in its core businesses. Despite these positive results, Abbott lowered its full-year organic revenue growth forecast from 7.5-8.5% to 6.0-7.0%, citing challenges in its Diagnostics business. Goldman Sachs maintained its Buy rating on Abbott, highlighting the company’s cost management efforts despite the revenue guidance reduction. The investment bank noted that Abbott’s stock had outperformed the S&P 500 index by approximately 670 basis points year-to-date. Additionally, Abbott’s strategic focus on innovation and market expansion in areas like continuous glucose monitoring and electrophysiology contributed to its solid performance. The company continues to anticipate high single-digit sales growth for the full year and expects to resolve current headwinds in the diagnostics market.
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