Abbott Labs stock rating reiterated at Buy by Benchmark on strong device sales

Investing.com - Benchmark has reiterated its Buy rating and $145.00 price target on Abbott Labs (NYSE:ABT), a $225.3 billion healthcare giant, following the company’s third-quarter results. According to InvestingPro analysis, Abbott appears undervalued based on its Fair Value estimate.

Abbott reported in-line quarterly results and narrowed its 2025 EPS guidance range while maintaining the mid-point. The company’s Medical Devices portfolio was the standout performer, with Diabetes Care up 19%, Electrophysiology up 16%, CRM up 15%, and structural heart up 14%. With a healthy gross margin of 56.14% and trading at a P/E ratio of 16.74, Abbott demonstrates strong operational efficiency. For deeper insights into Abbott’s valuation and growth potential, check out the comprehensive Pro Research Report available on InvestingPro.

Growth was partially offset by continued declines in COVID-19 testing, lingering market pressure in China for Diagnostics, and market share erosion in U.S. Pediatric Nutritionals. Core Lab grew 7% year-over-year excluding China, with management expecting improvement in the fourth quarter and to overcome tough comparisons in 2026.

The Nutritionals segment finished the quarter with 4% year-over-year growth, driven by strong international revenue which increased 13% compared to the same period last year.

Looking ahead to 2026, Abbott management expressed comfort with consensus estimates, reiterating long-term targets of high single-digit organic sales growth and double-digit adjusted EPS growth, citing portfolio momentum, new product launches, and expected easing of significant headwinds faced in 2025.

In other recent news, Abbott Labs reported its third-quarter earnings, aligning with analysts’ expectations with an earnings per share (EPS) of $1.30. However, the company slightly missed revenue forecasts, reporting $11.37 billion compared to the expected $11.4 billion. Despite these mixed results, RBC Capital reiterated an Outperform rating with a price target of $147.00, attributing the revenue miss to "multiple transient factors."

Wells Fargo raised its price target for Abbott Labs to $146.00, highlighting the strength in the company’s Medtech segment, while maintaining an Overweight rating. Jefferies also increased its price target to $146.00, citing growth in the medical device segment, which accounts for about 50% of Abbott’s sales and operates with higher margins. This segment is reportedly exceeding estimates and benefits from a strong pipeline of new products. These developments reflect ongoing confidence from analysts despite the revenue miss.

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