Abbott Labs stock price target lowered to $145 at BTIG on China headwinds

Investing.com - BTIG lowered its price target on Abbott Labs (NYSE:ABT) to $145 from $148 while maintaining a Buy rating on Thursday, as the healthcare company faces challenges in its China diagnostics business. According to InvestingPro data, Abbott maintains a GREAT financial health score of 3.15, with strong profit metrics and cash flows that sufficiently cover interest payments.

Abbott shares fell approximately 8% in Thursday trading despite beating second-quarter expectations on both top and bottom lines. The company revised its full-year guidance to the lower end of its previous range due to volume-based procurement issues in China’s Core Lab business and declining COVID test sales. With a P/E ratio of 15.7x and a market capitalization of $210 billion, Abbott remains a prominent player in the Healthcare Equipment & Supplies industry, as highlighted by InvestingPro analysis.

These challenges represent approximately $700 million or 750 basis points headwind to 2025 sales growth in the Diagnostics segment, which increases to over $1 billion when including HIV testing headwinds. BTIG characterized these issues as "a one-time dynamic out of ABT’s control that may be resolved around year-end."

Abbott’s revised 2025 full-year guidance now projects 7.5-8% organic sales growth (down from 7.5-8.5%), adjusted operating margins of 23.5% (down from 23.5-24.0%), and adjusted EPS of $5.10-$5.20 (narrowed from $5.05-$5.25). Management also informally endorsed 2026 analyst estimates, noting that high-single-digit top-line and double-digit bottom-line growth assumptions appear reasonable.

Despite the near-term challenges, BTIG remains bullish on Abbott’s long-term trajectory, citing strong performance in other segments including 8% year-over-year growth in Core Lab Diagnostics excluding China and approximately 12% organic growth in Medical (TASE:BLWV) Devices. The firm reduced its price-to-earnings multiple from 25x to 24.5x, resulting in the slightly lower price target. Abbott’s strong fundamentals are further evidenced by its 55-year history of maintaining dividends and 11 consecutive years of dividend increases. For deeper insights into Abbott’s valuation and growth prospects, including access to comprehensive Pro Research Reports covering 1,400+ top stocks, visit InvestingPro.

In other recent news, Abbott Laboratories reported its second-quarter 2025 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $1.26, slightly above the consensus forecast of $1.25. Revenue for the quarter reached $11.42 billion, exceeding projections of $11.07 billion, driven by strong sales in its core businesses. Despite these positive results, Abbott Labs reduced its full-year organic revenue growth forecast from 7.5-8.5% to 6.0-7.0%, primarily due to challenges in its Diagnostics segment. Evercore ISI maintained an Outperform rating on Abbott but lowered the stock’s price target to $140 from $145, citing the company’s organizational restructuring and market concerns. Meanwhile, Goldman Sachs kept its Buy rating and $153 price target, noting the guidance cut could lead to market volatility. Abbott’s management remains optimistic, reiterating its double-digit EPS growth forecast for fiscal years 2025 and 2026. These developments reflect Abbott’s efforts to manage revenue headwinds while maintaining its growth trajectory.

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