Abbott ABT released its first-quarter 2026 financial results on April 16. The healthcare giant’s worldwide sales increased 7.8% year over year on a reported basis to $11.16 billion, while adjusted diluted earnings per share (EPS) of $1.15 reflected 6% growth. Both top and bottom lines modestly surpassed the respective Zacks Consensus Estimates. Despite the beat, shares tumbled nearly 4% in the pre-market hours shortly after the announcement.
A major strategic highlight of the quarter was the completion of the $21 billion acquisition of Exact Sciences, which expands the company’s presence in the fast-growing cancer diagnostics market. As part of the transaction, Abbott assumed approximately $2.8 billion of Exact Sciences’ debt, of which $1.4 billion was repaid in March, and the remaining balance is expected to be settled by the year-end. The first quarter also partly reflected the impact of earlier-than-planned financing costs tied to the deal.
Against this backdrop, the company has guided a 2026 sales growth outlook of 6.5% to 7.5%, incorporating full-year sales from Exact Sciences in both the prior and current year. Adjusted EPS of $5.38 to $5.58 includes $0.20 of dilution related to the acquisition.
ABT Share Price Performance
On May 11, ABT stock fell to a new 52-week low of $81.97 intraday, before closing the session slightly higher at $82.56. Over the past three months, Abbott shares have dropped 25%, underperforming the industry, the broader Medical sector and the S&P 500 Composite. The company also lagged peers such as Medtronic MDT and Tandem Diabetes Care TNDM, whose shares have dipped 22.6% and 22.3%, respectively.
ABT’s 3-Month Price Comparison
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The technical indicator also points to a bearish trend. At current levels, ABT stock continues to trade below its 50 and 200-day simple moving averages.
ABT’s Technical Indicators
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A Quick Glance at Abbott’s Mixed Q1 Performance
Although Abbott’s Diagnostics sales rose 2% on a comparable basis (total reported growth excluding foreign exchange impact), Rapid and Molecular Diagnostics business sales fell 10% due to lower demand for respiratory virus testing amid a significantly weaker respiratory season. Core Lab Diagnostics also continued to face challenging market conditions in China, partially offsetting the steady growth in diagnostic test sales on the Alinity platform across the United States, Europe and Latin America. Meanwhile, the newly formed Cancer Diagnostics included $96 million in net sales contributed by Exact Sciences from the acquisition date.
Over the last several years, the Nutrition segment has struggled with higher manufacturing costs and elevated commodity prices that emerged following the pandemic. The company implemented price increases, but the move eventually constrained demand as consumers grew more price sensitive. In response, management introduced strategic pricing actions in the fourth quarter of 2025 to reaccelerate volume growth. First-quarter 2026 Nutrition results reflected the effects of these actions, alongside lower sales volumes compared with the prior year.
Established Pharmaceutical delivered double-digit growth in several countries across Latin America and the Asia Pacific regions, supported by favorable, long-term health care, economic and demographic trends. Abbott’s broad product lineup across five therapeutic areas and an expanding biosimilars portfolio backs demand.
Lastly, Medical Devices sales increased 8.5%, driven by strength in Electrophysiology, Rhythm Management and Heart Failure businesses. Within Diabetes Care, continuous glucose monitoring sales reached $2 billion. However, growth was affected by a delay in the international tender renewal process and a difficult prior-year comparison.
Abbott is also seeing increased competitive intensity in the mitral space following portfolio expansion by a key competitor. Management acknowledged the need to improve execution in the U.S. market.
Abbott’s Pipeline Achievements and Regulatory Nods
The company expects growth in Electrophysiology to accelerate with the scaled launches of its new pulsed field ablation catheters, Volt and TactiFlex Duo. During the first quarter, Abbott also completed patient enrollment in the CARALYST Left Atrial Appendage device trial and kicked off development activities to bring an implantable extravascular ICD product to market.
The company also announced positive results from its randomized controlled trial, which showed that people with Type 2 diabetes on basal insulin therapy benefited from using Libre, including reductions in HbA1c and increased time spent in the healthy glucose range.
Recently, Abbott secured FDA clearance and CE Mark for its Ultreon 3.0 artificial intelligence-powered imaging platform. The software uses optical coherence tomography to give doctors real-time planning guidance while performing minimally invasive procedures to open blocked heart arteries.
Abbott’s Legal Challenges Mount
The company is facing a number of lawsuits involving its preterm infant formula and human milk fortifier products that contain cow’s milk ingredients. Plaintiffs allege that the products are causing necrotizing enterocolitis (NEC), a life-threatening intestinal disease primarily affecting premature infants, and that Abbott has failed to provide adequate warnings regarding the risks of NEC.
In April, a Chicago jury ordered Abbott to pay $70 million in compensatory and punitive damages to a group of families. According to the filings, children born in the Chicago-area hospitals between 2012 and 2019 developed NEC and still continue to suffer health problems. In another case, a Missouri appellate court upheld a $495 million verdict against Abbott over similar claims.
ABT Stock Valuation
Abbott trades at a five-year price-to-sales (P/S) of 2.82X, lower than its 4.64X median but above its industry average of 2.02X.
Abbott’s 5 Year P/S
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In comparison, Medtronic shares are trading at 2.57X, while Tandem Diabetes has a P/S of 0.90X.
End Note
Abbott’s diversified portfolio remains its core strength, as reflected in its latest earnings performance. The pipeline achievements within Medical Devices appear to be promising for long-term growth. However, Diagnostics’ performance could remain uneven as respiratory seasons fluctuate, while China continues to be a source of uncertainty. The Exact Sciences acquisition adds a new growth vertical but introduces short-term dilution risk. Litigation challenges tied to Abbott’s Nutrition business could weigh on its competitive standing.
Apart from trailing its industry, the stock’s recent performance has lagged its peers, while its valuation also appears relatively expensive. Given the operational challenges and legal headwinds, existing ABT holders may find it prudent to exit their positions for now.
Abbott carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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