Last Update 12 Dec 25

ABT: Exact Sciences Deal And Legal Wins Will Drive Future Upside

Analysts made a modest adjustment to their Abbott Laboratories price targets, with estimates moving in a roughly $2 range around the mid-$140s as they balanced optimism around the pending Exact Sciences acquisition, resilient device driven growth, and favorable legal developments against some near term lumpiness in non device segments.

Analyst Commentary

Research coverage around Abbott remains largely constructive, with most views anchored on a durable devices growth profile, incremental benefits from the proposed Exact Sciences transaction, and diminishing legal overhangs. At the same time, expectations for near term execution remain finely balanced as investors weigh integration risk and uneven trends outside the core device portfolio.

Bullish Takeaways

Bullish analysts highlight Abbott's diversified business model and exposure to multiple high demand healthcare segments as a foundation for steady mid single digit sales growth and double digit earnings expansion, supporting premium valuation multiples versus medtech peers.
Device driven momentum, particularly in Medical Devices, is viewed as intact and accelerating, reinforcing confidence in Abbott's ability to deliver 7 to 8 percent organic revenue growth and over 10 percent bottom line growth across the cycle.
The proposed acquisition of Exact Sciences is seen as financially attractive for Abbott over the long term, adding a scaled, high growth diagnostics asset that can enhance the revenue mix, expand the addressable market, and deepen Abbott's oncology testing presence.
Positive legal developments, including recent case dismissals in infant formula litigation, are interpreted as easing headline risk and potential liabilities, which in turn support a more constructive risk reward profile and help justify price targets in the mid $140s.

Bearish Takeaways

Bearish analysts flag near term lumpiness in non device segments and modest headline misses versus consensus as constraints on multiple expansion, arguing that current valuation already embeds a healthy execution premium.
Some caution that investor expectations around the Exact Sciences deal may be running ahead of realized synergies, with questions on integration, potential dilution, and the sustainability of high growth diagnostics multiples if macro or reimbursement conditions soften.
There is concern that to secure a strategic oncology diagnostics platform, Abbott may need to pay at or above rich takeout multiples implied by recent commentary, which could pressure near term returns on invested capital even if long term growth is enhanced.
A subset of more cautious voices suggest that while recent legal wins are positive, the broader litigation backdrop still introduces uncertainty around tail risk, keeping some investors on the sidelines until there is clearer visibility on remaining case outcomes.

What's in the News

Abbott is reportedly nearing a deal to acquire cancer test maker Exact Sciences, with terms under discussion and a potential announcement expected in the coming days, though talks could still be delayed or fall through (Bloomberg)
Shares of Exact Sciences surged more than 25% while Abbott’s stock fell about 3% following reports that Abbott is weighing a takeover of the medical testing company, highlighting mixed investor reactions to the potential transaction (Bloomberg)
Market chatter continues to center on Abbott being close to finalizing an agreement to buy Exact Sciences, reinforcing expectations that a significant oncology focused diagnostics acquisition may be imminent (Bloomberg)

Valuation Changes

Fair Value Estimate: Unchanged at approximately $144.43 per share, indicating no revision to the intrinsic value outlook.
Discount Rate: Fallen slightly from about 7.83 percent to 7.81 percent, reflecting a marginally lower perceived risk profile.
Revenue Growth: Effectively unchanged, holding around 7.62 percent, signaling a stable medium term top line growth outlook.
Net Profit Margin: Flat at roughly 17.53 percent, with only immaterial rounding differences versus prior assumptions.
Future P/E: Edged down slightly from about 33.1x to 33.0x, pointing to a marginally lower valuation multiple applied to forward earnings.

Strong demand from emerging markets and aging populations, along with new product launches, is expected to fuel sustained growth and diversify revenue streams.
Innovation in high-margin medical technologies and a diversified business mix will drive market share gains and support stable, long-term earnings.
Margin and revenue growth are threatened by pricing pressures, regulatory risks, intensifying competition, global volatility, and increased investment requirements across Abbott's core business segments.

Catalysts

About Abbott Laboratories

Abbott Laboratories, together with its subsidiaries, discovers, develops, manufactures, and sells health care products worldwide.What are the underlying business or industry changes driving this perspective?

The expansion of healthcare access and rising middle class in key emerging markets (such as India, China, Latin America, and the Middle East) is fueling robust growth in branded generics and biosimilars, highlighted by Abbott's record sales in these regions and imminent biosimilar launches; this trend is poised to drive sustained double-digit top-line growth and greater geographic revenue diversification.
The global demographic shift toward an aging population and increasing prevalence of chronic and lifestyle-related diseases (e.g., diabetes, cardiovascular disease) is underpinning strong, recurring demand for Abbott's diagnostics, nutrition (e.g., Ensure, Glucerna), and high-growth medical device franchises-supporting revenue acceleration and enhanced operating leverage.
Abbott's ongoing innovation in high-margin segments, most notably through the FreeStyle Libre franchise (with next-gen, dual-analyte sensors and new software integrations) and pipeline launches in structural heart and rhythm management devices, positions the company to capture incremental market share and drive net margin expansion.
Recent headwinds (COVID testing declines, China diagnostics procurement, and HIV funding) are transient and expected to lapse by 2026, while new product launches (biosimilars, next-gen devices, systems integration) and regulatory expansions are set to accelerate revenue growth and improve earnings visibility.
Abbott's ability to leverage existing infrastructure and cross-segment synergies in emerging markets, coupled with a diversified business mix across nutrition, diagnostics, devices, and established pharmaceuticals, reduces earnings volatility and should support stable long-term earnings and margin improvement.

Abbott Laboratories Earnings and Revenue Growth

Abbott Laboratories Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Abbott Laboratories's revenue will grow by 7.3% annually over the next 3 years.
Analysts assume that profit margins will shrink from 32.3% today to 17.6% in 3 years time.
Analysts expect earnings to reach $9.4 billion (and earnings per share of $5.39) by about August 2028, down from $13.9 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $8.2 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.1x on those 2028 earnings, up from 16.2x today. This future PE is greater than the current PE for the GB Medical Equipment industry at 27.3x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.61%, as per the Simply Wall St company report.

Abbott Laboratories Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Diagnostic sales are experiencing significant headwinds due to declining COVID testing demand, ongoing effects from volume-based procurement (VBP) in China, and reduced US foreign aid funding for HIV testing; if VBP-related price erosion or Chinese market volatility persists or worsens, it could create persistent downward pressure on Diagnostic division revenues and overall company top-line growth.
The company faces exposure to tariffs (expected ~$200 million impact) and adverse foreign exchange movements (ongoing EPS headwind of up to 4%), both of which could compress operating margins and earnings, particularly if trade tensions or global currency volatility intensifies.
Competitive bidding initiatives for continuous glucose monitors (CGM) in the US, coupled with rising competition from other CGM providers and potential commoditization of diagnostic and device platforms, threaten Abbott's pricing power and could erode net margins and long-term revenue growth in its core diabetes franchise.
While international expansion, especially in emerging markets and branded generics, is currently driving growth, overdependence on these geographies exposes Abbott to risks from changing regulatory policies, government price controls, and currency fluctuations, potentially making future earnings less predictable.
Ongoing litigation risk (e.g., infant formula MDL), regulatory hurdles (including potential for stricter or lengthier device and biosimilar approval processes), and the need for significant R&D and SG&A investment to support new product development and launches may raise costs, delay time-to-market, and impact overall profitability and net margins over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $142.485 for Abbott Laboratories based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $159.0, and the most bearish reporting a price target of just $122.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $53.3 billion, earnings will come to $9.4 billion, and it would be trading on a PE ratio of 33.1x, assuming you use a discount rate of 7.6%.
Given the current share price of $129.4, the analyst price target of $142.48 is 9.2% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

ABT: Legal Wins And Device Momentum Will Support Durable Growth Ahead