Raymond James has reduced its price target for Abbott Laboratories to $130 from $146 while maintaining an Outperform recommendation. The adjustment follows disappointing fourth-quarter results, particularly in the Nutrition segment, which have contributed to a recent share price decline nearing the 52-week low. Despite these challenges, the firm points to Abbott's historically strong growth and current valuation as reasons for continued optimism.
Key Points
- Raymond James reduced Abbott Laboratories' price target to $130 from $146 due to subdued fourth-quarter results, especially in the Nutrition segment.
- Abbott's stock price has declined by over 10% recently, nearing its 52-week low level, highlighting current market concerns.
- Despite pressures, analysts maintain an Outperform rating, citing Abbott's discounted valuation and historical ability to handle Nutrition-related challenges.
Raymond James has revised the price target for Abbott Laboratories (NYSE: ABT) downward, setting it at $130 from a previous $146. This adjustment comes amid a recent decline in Abbott’s stock price, which has fallen by approximately 10.8% over the last week, currently trading around $108.61, close to its 52-week low of $105.78, as per InvestingPro data.
The lead analyst at Raymond James, Jayson Bedford, characterized Abbott's fourth-quarter results as "soft," specifically noting the negative impact from the Nutrition segment, which represents about 17% of the company's total sales. The segment’s underperformance is anticipated to continue exerting pressure on near-term revenue growth, potentially dampening investor sentiment towards Abbott Laboratories.
Despite the reduction in the price target, Raymond James has maintained its Outperform rating on Abbott’s stock. The firm acknowledged the frustrations linked to the ongoing Nutrition segment challenges but emphasized that Abbott has previously navigated similar obstacles. Additionally, the company’s current valuation is viewed as attractive, which bolsters the positive stance on the stock. However, Raymond James also pointed out that the contraction in valuation multiples signals a reduced confidence in Abbott’s historically reliable growth trajectory of roughly 7% for top-line revenue and over 10% on the bottom line.
In a related development, Abbott Laboratories recently released its fourth-quarter 2025 financial results, meeting earnings per share expectations with $1.50 but falling short on revenue, which totaled $11.46 billion against projected figures of $11.8 billion. This revenue shortfall was mainly driven by the Nutrition division recording $1.94 billion in sales compared to consensus estimates of $2.2 billion.
Following these earnings, Jefferies adjusted its price target for Abbott to $145 from $149 while maintaining a Buy rating, reflecting the broader industry challenges faced by the company, especially within the Nutrition segment.
Overall, these events highlight certain hurdles in Abbott's financial performance, but influential analysts retain cautious optimism based on valuation and historical precedent. Investors are advised to monitor ongoing developments within the Nutrition segment to assess future impacts on Abbott’s growth and market performance.
Risks
- Continued underperformance of Abbott’s Nutrition segment may further suppress revenue growth and investor confidence, impacting healthcare and consumer nutrition markets.
- Revenue shortfalls relative to consensus expectations introduce uncertainty around Abbott’s near-term financial performance, relevant to healthcare investors.
- Valuation multiple contraction indicates market skepticism about Abbott maintaining its historical growth rates, potentially affecting stock price outlook in the biotech and healthcare sectors.