Tariff-Resistant Abbott Laboratories on Track for New Highs

Key Points

• Abbott Laboratories had a solid Q1 and reaffirmed its full-year outlook, leading the shares to rise by 5%. 
• The market confirms support at a critical level and is on track to retest the all-time high. 
• Analysts suggest this stock could rise to new highs before the year's end and gain as much as 20% from critical support targets. 

Abbott Laboratories NYSE: ABT is not immune to the impact of tariffs on its medical device business. However, the company’s diversified business is tariff-resistant, and moves are being made to strengthen it further.

Those include a $500 million investment in two domestic manufacturing facilities expected to go live by year’s end. 

The facilities are located in Texas and Illinois and are expansions of existing locations intended to increase production capacity while reducing costs. The takeaway for investors is that the company is growing in 2025, on track to sustain growth while improving operational quality, and its dividend is safe and reliable.

Another critical takeaway is that the market reaction to the stock price news was a significant 5% increase, which confirms an uptrend and puts this healthcare stock on track to reach a new high before the end of the year. 

Diversification and End-Market Strength Drive Results for Abbott

Abbott is not growing robustly, but its diversified business is growing with strength in all core segments. The company’s $10.36 billion in Q1 revenue fell slightly short of the analysts' consensus forecast but is up 4% year-over-year on a reported basis, 6.9% organically, and 8.3% adjusted for COVID-19 impact. COVID-19 sales remain in the picture but have dwindled to below $100 million quarterly. 

Segmentally, the Diagnostics segment, which includes COVID-19 sales, contracted by 4.9% organically but increased by 0.5% adjusted. Medical Devices led with a 12.6% increase, followed by 7.8% and 6.8% increases in Established Pharmaceuticals and Nutrition. Regionally, U.S. sales were strongest, up 8.9%, while International healthcare sales grew by 5.7%.

Margin news is better. The company widened its gross and operating margin on revenue leverage and efficiency gains to drive accelerated bottom-line growth. The adjusted EPS grew at a low double-digit pace compared to the 4% revenue growth, and the margin is expected to remain strong as the year progresses.

The company’s full-year guidance calls for an 8% organic revenue and 10% adjusted earnings growth. The guidance may be cautious due to early product approvals and promising pipeline developments. 

Analysts' Trends Drive Abbott Laboratories' Stock Price Action

Abbott’s analyst trends are positive and support the uptrend in the price action. The trends include increasing coverage, firming sentiment, and a rising consensus target. The only negative is that the consensus target aligns with the price action in mid-April, suggesting the stock is fairly valued, but the revision trend indicates a move to the high-end range is possible.

That puts this market in the range of $150 to $160 by year’s end, a nearly 20% increase in addition to the dividend. The dividend annualizes to almost 2% in early Q2, and the distribution grows annually. Abbott Laboratories has increased its payout for over 50 years and can continue improving it for many years. 

Abbott Laboratories' stock price is in an uptrend, as confirmed by the post-release action. The market is up more than 5%, showing support at the 150-day EMA and above a critical resistance target. The market will likely continue advancing in April, and the all-time high could be retested by the end of the month. 

Setting a new high would be a clear signal that this market intends to continue onward and could advance to the $160 level by the end of the year in this scenario. If not, Abbott’s market could remain range-bound with a ceiling at $140 until more news is available.

The worst-case scenario is that Abbott shares retreat to the low end of their range, but that is not expected due to the institutional trends. Institutions are buying this stock on balance, providing a tailwind for price action in 2025.