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Investing.com - UBS has reiterated its Buy rating and $148.00 price target on Abbott Labs (NYSE:ABT) despite shares facing pressure following lower fiscal year 2025 sales guidance. According to InvestingPro data, Abbott’s current trading price of $124.77 suggests potential upside, with analyst targets ranging from $120 to $159.
The diagnostics segment weakness is proving more persistent than expected, according to UBS, but this doesn’t alter the firm’s bullish outlook on the company. Abbott reported 12.2% organic growth in its MedTech division during the second quarter of 2025, exceeding the consensus estimate of 11.2%. The company maintains strong financial health with an overall score of "GREAT" on InvestingPro’s comprehensive assessment system.
The company achieved 6.9% organic total sales growth, or 7.5% when excluding COVID diagnostics, despite challenges in its diagnostics business which represents approximately 25% of Abbott’s overall operations. With a market capitalization of $217 billion and consistent dividend payments for 55 consecutive years, Abbott remains a prominent player in the Healthcare Equipment & Supplies industry.
UBS sees potential offsets to the diagnostics weakness coming from Abbott’s robust MedTech pipeline, including the VOLT system and dual analyte sensor. The Aveir leadless pacemaking system is also expected to sustain high-single-digit sales growth for at least the next few years.
The electrophysiology (EP) segment maintained double-digit growth despite a portfolio gap this year, with UBS noting that investor expectations remain low for growth outside of mapping capabilities.
In other recent news, Abbott Laboratories reported quarterly sales of $11.14 billion, showcasing a 7.5% organic growth year-over-year, excluding Covid-related revenue. The company’s earnings per share reached $1.26, slightly surpassing consensus estimates. Abbott has adjusted its 2025 revenue growth forecast to 7.5%-8.0%, citing headwinds from China’s volume-based procurement in its diagnostics business. The company also narrowed its earnings per share guidance to $5.10-$5.20, down from the previous range of $5.05-$5.25. Citi, BTIG, and Mizuho (NYSE:MFG) have all lowered their price targets for Abbott, reflecting concerns over these challenges, while maintaining their respective ratings. Meanwhile, Jefferies upgraded Abbott from Hold to Buy, viewing the recent stock pullback as an opportunity, and raised its price target to $145.00. Jefferies believes that the diagnostic hardware challenges are temporary and sees potential for accelerated growth in 2026. Despite the current headwinds, Abbott’s Medical (TASE:BLWV) Devices and Established Pharmaceuticals divisions have shown strong performance, contributing to the company’s overall growth.
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