’Reddit is built for this moment’ - Stock soars on crushed earnings
On Wednesday, BTIG analyst Marie Thibault adjusted the price target for Abbott Laboratories (NYSE:ABT) upward to $145 from $140, while maintaining a Buy rating on the stock. The revision follows Abbott’s performance which saw shares rise despite broader market challenges. The stock, currently trading at $129.70, has delivered an impressive 24.93% return over the past year. According to InvestingPro analysis, Abbott’s stock is currently fairly valued, with 8 additional exclusive insights available to subscribers. The company’s management reaffirmed its 2025 guidance and provided updates on strategies to mitigate the impact of tariffs.
Abbott reported its first-quarter adjusted earnings per share (EPS) at two cents above expectations, although it faced a slight sales shortfall due to the volume-based procurement headwinds in China’s Core Lab business. Despite this, the company has maintained its full-year guidance, projecting 7.5-8.5% organic sales growth, adjusted operating margins between 23.5-24.0%, and an adjusted EPS of $5.05-$5.25. With a robust gross profit margin of 55.56% and an impressive return on equity of 31%, Abbott demonstrates strong operational efficiency. InvestingPro’s comprehensive health score of "GREAT" reflects the company’s solid financial position.
Management highlighted Abbott’s strong start to the year and indicated that they might have considered raising the EPS guidance if not for the uncertainties surrounding tariffs. The current forecast for the fiscal year 2025 includes an estimated impact of several hundred million dollars from tariffs, expected to affect the cost of goods sold starting in the third quarter. Abbott is exploring various short-term and long-term strategies to offset these costs, including leveraging its global manufacturing network and the strength of the U.S. market.
Abbott’s first-quarter results demonstrated some of these offsetting factors, with lighter foreign exchange headwinds and improved gross margins year-over-year. The company’s management emphasized that tariff mitigation efforts would not hinder investments in research and development or sales and general administration expenses, supporting sustained revenue growth.
Abbott’s ability to quickly set up certified clean rooms for its COVID tests was cited as evidence of the company’s scale and manufacturing expertise. With a positive outlook for the year, new growth drivers, its status as a Dividend King having maintained payments for 55 consecutive years, and a strong balance sheet evidenced by its healthy 1.67 current ratio, BTIG’s Thibault believes Abbott is well-positioned in the current economic climate. For deeper insights into Abbott’s financial health and growth potential, access the complete Pro Research Report, part of InvestingPro’s extensive coverage of over 1,400 US stocks. The price target increase to $145 is based on applying a 25x price-to-earnings multiple to the firm’s adjusted EPS forecast for the next 12-24 months.
In other recent news, Abbott Laboratories reported its first-quarter 2025 earnings, exceeding expectations with an adjusted earnings per share (EPS) of $1.09, surpassing the projected $1.07. Despite a slight revenue miss at $10.36 billion compared to the forecasted $10.4 billion, the company demonstrated a strong performance with an 11% year-over-year increase in adjusted EPS. Abbott reaffirmed its full-year guidance, anticipating high single-digit organic sales growth, driven by new product launches and margin expansion. The company also highlighted its strategic focus on innovation and diversification, with several product launches, including the Vault PFA system for atrial fibrillation.
Evercore ISI recently raised its price target for Abbott Laboratories to $140, maintaining an Outperform rating, citing the company’s diversified business and robust balance sheet as key strengths. Analysts noted Abbott’s ability to manage earnings per share effectively amid market uncertainties. Additionally, Abbott’s management emphasized strategies to mitigate potential impacts from foreign exchange rates and ongoing tariff challenges. These developments underscore Abbott’s resilience and strategic positioning in the competitive medtech industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.