Stifel cuts Abbott Labs stock target to $135, maintains buy rating

On Thursday, Stifel analysts adjusted their outlook on Abbott Laboratories (NYSE:ABT) by reducing the stock’s price target to $135 from the previous $145, while still upholding a Buy rating on the shares. The adjustment follows Abbott’s first-quarter performance for 2025, which, despite facing macroeconomic challenges and tariff headwinds, was characterized as resilient by the analysts. With a market capitalization of $225 billion and an impressive InvestingPro Financial Health score of "GREAT," Abbott demonstrates strong fundamentals and low volatility with a beta of 0.8.

Abbott reported first-quarter sales of $10.36 billion, a 6.9% increase year-over-year, which closely matched Stifel’s projection of $10.35 billion but was slightly below the consensus estimate of $10.41 billion. The slight miss was attributed to lower-than-expected Covid testing sales and challenges in China due to volume-based procurement headwinds. The company maintains healthy profitability with a gross margin of 55.92% and has demonstrated consistent growth, with trailing twelve-month revenue reaching $42.3 billion.

The Medical (TASE:BLWV) Device division of Abbott stood out, exhibiting growth at the higher end of the MedTech sector with a 12.6% year-over-year increase. Notable performances within this division included Diabetes care, which saw a 19.8% increase, Structural Heart at 14.7%, and Heart Failure treatments growing by 12.4%.

In terms of profitability, Abbott’s earnings per share (EPS) for the first quarter of 2025 were $1.09, exceeding the Stifel and consensus estimate of $1.07 per share. This beat was driven by gross margins that outperformed expectations.

Looking to the future, Abbott has reaffirmed its full-year 2025 guidance, anticipating organic revenue growth between 7.5% and 8.5%, and maintaining EPS projections in the range of $5.05 to $5.25. Trading at a P/E ratio of 16.5x and an attractive PEG ratio of 0.13, Abbott appears reasonably valued according to InvestingPro metrics, which has identified 10+ additional investment tips for this stock. Despite the challenges, Abbott’s overall performance and outlook appear to align with Stifel’s criteria for a quality growth company, as indicated by the maintained Buy rating.

In other recent news, Abbott Laboratories reported its first-quarter 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $1.09, compared to the forecasted $1.07. Despite a slight revenue miss, the company posted a total revenue of $10.36 billion, slightly below the projected $10.4 billion. Abbott’s Medical Devices sector showed significant growth, with revenues reaching $4.90 billion, marking a 12.6% organic increase. The company has maintained its full-year guidance, projecting an organic sales growth of 7.5% to 8.5% and an adjusted EPS of $5.05 to $5.25.

Analysts from Oppenheimer, Raymond (NSE:RYMD) James, BTIG, and Evercore ISI have positively adjusted their price targets for Abbott Laboratories, reflecting confidence in the company’s future performance. Oppenheimer raised its target to $140, citing Abbott’s solid performance in the Medical Devices sector. Raymond James increased its target to $142, noting the company’s consistent execution and diversified product portfolio. BTIG set a new target at $145, emphasizing Abbott’s robust start to the year and strategies to mitigate tariff impacts. Evercore ISI also adjusted its target to $140, highlighting Abbott’s resilience and strong financial position.

Abbott has also made notable advancements in its product offerings, including the EU CE-Mark approval for the PFA-VOLT catheter and the initiation of a pivotal trial for its Coronary Intravascular Lithotripsy (IVL) system. The company plans to complete enrollment for the IVL trial by 2026. Furthermore, Abbott has reiterated its strategies to offset potential tariff impacts, leveraging its global manufacturing network and the strength of the U.S. market. Despite these challenges, Abbott remains committed to its growth trajectory and continues to invest in research and development.

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