The market still treats Abbott Laboratories (NYSE:ABT | ABT Price Prediction) like a bond proxy with a stethoscope: baby formula, branded generics, and a metronomic dividend. That framing looks increasingly stale, and the stock’s punishing drawdown has widened the gap between narrative and numbers.
Abbott is a card-carrying S&P 500 Dividend Aristocrat, riding a 54th consecutive year of dividend increases and a 410th consecutive quarterly payout of $0.63 per share. A beta of 0.607 reinforces the “sleep well at night” identity. That reputation is precisely why the transformation underneath it is being underpriced.
A New Growth Engine and a Pivot Hiding in Plain Sight
Medical Devices is now the dominant engine, generating $5.54 billion in Q1 2026, up 13.2%. Inside that segment, the FreeStyle Libre continuous glucose monitor franchise cleared $2.08 billion in the quarter, growing 13.8%. CEO Robert Ford is explicit about the runway: “Our assessment of the number of people who should be on a CGM on a global basis is between 70 million and 80 million people. The market today is around 10 to 12 million people.”
Established Pharmaceuticals grew 13.2% and international sales rose 11.3%. Adjusted EPS came in at $1.15, the fourth consecutive beat, with full-year adjusted EPS guidance of $5.38 to $5.58. Abbott remains a compounder still compounding.
On March 23, 2026, Abbott closed its roughly $21 billion acquisition of Exact Sciences, launching a Cancer Diagnostics unit anchored by Cologuard and Cancerguard. Management expects approximately $3 billion of incremental sales in 2026. Ford framed the strategic logic: “About 50 million Americans are not up to date with CRC screening… Cologuard does really well here. Not only is it convenient at home, but its sensitivity at 95% is equivalent to colonoscopy.”
The Mispricing
Shares closed most recently at $89.27, down 28.8% year to date and 32.1% over one year. The $116.54 analyst consensus target is below the 52-week high of $137.49, yet analysts overall still recommend buying shares. The forward P/E is 17.
For investors weighing durable payers (our Dividend Kings research covers this cohort in depth), the disconnect between fundamentals and price action is notable.
Reframing the Legacy Drag
Nutrition fell 6.0% to $2.02 billion, the piece of “old Abbott” the market fixates on. Ford has been clear that this is deliberate: “We did not reduce price uniformly; we kept it focused on products that… would demonstrate a positive volume response to reduced price.”
Nutrition volume recovery, FX, $0.20 per share of Exact Sciences dilution, China volume-based procurement, and continuous glucose monitoring competition from DexCom (NASDAQ:DXCM) are genuine. Polymarket traders currently place the probability of Q2 comparable sales growth falling within the 4% to 8% band at 44% to 45%. These are the concerns of a growth-plus-quality compounder.
This article is research commentary, not investment advice.
Contact [email protected] for any questions or corrections.
Top Gaining Stocks
Top Losing Stocks