Two Analysts Just Turned Bullish on This Healthcare Giant, But The Stock Hasn't Noticed

30‑Second Take

Why now? Abbott is down about 21% this year and sits roughly 27% below its 52-week high. The low came in May, after the company trimmed its 2026 earnings guidance to absorb its $21 billion Exact Sciences deal.

Then the story turned. In July, Abbott raised its full-year EPS guidance to $5.45 to $5.60, and the shares jumped about 11% in the weeks that followed. Most of that bounce has since faded.

What changed this month is the Street. Rothschild & Co Redburn upgraded the stock to Buy on October 2 with a $127 target, citing momentum in cardiovascular devices.

Barclays started coverage at Overweight on October 6. Third-quarter results land on Wednesday, October 21, before the open.

Trade Setup

Timeframe: Swing to position trade (1 to 6 months)
Edge type: Product-cycle catalysts plus analyst upgrades on a stock that has lagged

The setup is simple. You're buying a defensive, dividend-paying company at a discount to where it traded most of last year, right as its newest heart devices start selling.

If the October 21 report shows electrophysiology sales accelerating, the gap between the business and the share price should start to close. If it doesn't, you're holding a low-volatility stock that pays you to wait.

Snapshot Table

Chart

1-Month Trading Summary: ABT has given back about 7% over the past month and is down about 21% year to date. It peaked near $135 last year, bottomed just under $82 in May, then rallied through the summer after the July guidance raise.

The stock has drifted lower since early September despite a string of FDA approvals. That disconnect is the opportunity here.

Bull Case 

Why It Works

Electrophysiology, the business that treats irregular heart rhythms, is Abbott's fastest-growing device franchise. The hottest technology in that market is pulsed field ablation, and Abbott was late to it.

That gap is closing. The Volt pulsed field ablation system won FDA approval in December 2025, and the TactiFlex Duo catheter, which can deliver both pulsed field and traditional radiofrequency energy, was approved on September 8.

More procedures on Abbott's platform means more disposable catheters sold, again and again.

The Catalysts

The first catalyst is the October 21 earnings report. You'll want to see electrophysiology growth picking up as the new devices roll out.

The second is diabetes care. FreeStyle Libre is already one of the biggest products in medtech, and in August the FDA authorized Libre Duo, the first wearable sensor that tracks both glucose and ketones. That gives patients a new reason to stay in Abbott's ecosystem.

The third is cancer screening. The Exact Sciences deal, the reason guidance was cut in April, gives Abbott the Cologuard franchise. As the dilution fades, that business should start adding to growth instead of weighing on earnings.

What The Numbers Say

At the July guidance midpoint, the stock trades around 18 times this year's adjusted earnings. Trailing GAAP earnings look much more expensive, about 32 times, because of deal amortization.

Abbott pays $0.63 a quarter, or $2.52 a year, for a yield of about 2.6%. Redburn's $127 target sits roughly 30% above the current price.

Bear Case 

What Could Break It

The infant formula lawsuits haven't gone away. A Chicago jury awarded $70 million in April over Abbott's preterm infant formula, and the company settled a portion of the cases in August. More verdicts can still knock the stock around.

Medical device pricing is also under pressure, and China's volume-based purchasing program has been squeezing margins for every big medtech company with exposure there.

The Valuation Risk

Around 18 times forward earnings is not a bargain-bin multiple. If the October 21 report shows the new heart devices ramping slower than hoped, the stock can stay stuck in its range.

The Exact Sciences deal also added debt. Abbott raised about $20 billion in notes to pay for it, which limits flexibility until that's paid down.

How To Size It

Start with half of what you'd normally commit before the October 21 report. Add the rest if electrophysiology growth and full-year guidance hold up.

If the stock breaks back toward its May low after earnings, step aside and reassess. A low-beta stock shouldn't need a wide stop to work.

Quick Checklist 

✅ Q3 earnings date confirmed (Wednesday, October 21, before the open)
✅ Electrophysiology growth and Volt/TactiFlex Duo commentary reviewed after the report
✅ Full-year EPS guidance ($5.45 to $5.60) reaffirmed or raised
✅ Position sized to hold through an earnings-day move

Deep‑Dive Links

• Latest earnings report

• Analyst ratings and price targets

• Short interest data

• Company profile and investor relations

That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!

Best Regards,
—Noah Zelvis
Everyday Alpha