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Investing.com - Jefferies upgraded Abbott Laboratories (NYSE:ABT) from Hold to Buy while raising its price target to $145.00 from $143.00. The healthcare giant, currently valued at $209.67 billion, appears undervalued according to InvestingPro’s Fair Value model.
The upgrade comes despite what Jefferies described as an "underwhelming" second-quarter update and guidance from the healthcare company.
Jefferies views the stock’s recent pullback as "too punitive" and considers the current reaction as an opportunity to take a more positive stance on Abbott’s shares.
The firm believes diagnostic hardware challenges are "transitory" and sees favorable fundamentals for Abbott, with potential for accelerated growth in 2026.
Jefferies considers Abbott’s valuation of 21 times projected 2026 earnings as "compelling for a quality franchise with multiple growth drivers," and while modeling 2025 results at the midpoint of guidance, the firm sees room for upside and has estimates above consensus for 2026.
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, and a revenue of $11.42 billion, exceeding the anticipated $11.07 billion. Despite these positive results, the company lowered its 2025 organic revenue growth forecast from 7.5-8.5% to 6.0-7.0%, primarily due to ongoing challenges in its Diagnostics business. BTIG and Evercore ISI lowered their price targets on Abbott Labs to $145 and $140, respectively, while maintaining positive ratings, citing challenges in the China diagnostics market as a key concern.
Goldman Sachs maintained its Buy rating on Abbott Labs, keeping its $153 price target unchanged, despite acknowledging the reduced sales outlook could create market volatility. 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. Abbott’s revised 2025 full-year guidance now projects 7.5-8% organic sales growth and adjusted EPS of $5.10-$5.20.
Despite these challenges, Abbott demonstrated 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 company remains optimistic about its long-term trajectory, with management endorsing 2026 analyst estimates for high-single-digit top-line and double-digit bottom-line growth.
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