Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
Investing.com -- Shares of Abbott Laboratories (NYSE:ABT) declined 3.2% after a judge ordered a retrial in the Whitfield case, which originally ruled in favor of Abbott and Reckitt’s Mead Johnson. The unexpected legal development reintroduced uncertainty into the situation, affecting investor sentiment.
The ruling overturned a previous verdict related to an infant formula case and has implications for both Abbott and Reckitt, with the latter’s shares also falling by 4.5%. The legal battle revolves around the Whitfield case, which pertains to the alleged link between infant formula and necrotizing enterocolitis (NEC) in premature infants.
RBC analyst James Edwardes Jones commented on the impact of the retrial order, stating, "The judge ordering a retrial in the Whitfield case reintroduces uncertainty to a process that had seemed to be going Reckitt’s way." He further elaborated on the potential timeline for the appeals process and subsequent retrial, suggesting it could take up to 18 months for the appeal and an additional 6-12 months for a retrial if necessary.
Similarly, a Jefferies analyst described the overturning of the ruling as a "market risk perception setback," noting that the appeal and potential retrial could extend the timeline significantly, with a retrial likely two years away.
In their response to the ruling, a Reckitt spokesperson expressed disagreement with the judge’s decision, stating to Bloomberg, "This decision is at complete odds with the law and the facts, and we will appeal.” They emphasized the original jury’s unanimous decision, which aligned with the scientific consensus, exonerating Mead Johnson of liability.
The legal developments have cast a shadow over Abbott’s stock performance, as investors weigh the potential implications of the retrial and the associated uncertainties. With the appeal process expected to be lengthy, the market’s reaction reflects concerns over the ongoing NEC litigation and its outcomes for both Abbott and Reckitt.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.