Rothschild Redburn Upgrades Abbott Labs to Buy on Devices

Rothschild Redburn upgraded Abbott Laboratories (NYSE:ABT) to Buy from Neutral, raising its price target to $127 from $119, driven by strong growth expectations in its medical devices and diabetes operations, according to an Investing.com report.

The upgrade reflects rising confidence in Abbott's core device portfolio as the healthcare giant works past prior supply chain disruptions and legal overhangs. The firm expects Abbott's Medical Devices business to grow 10.6% organically in fiscal 2026, with the diabetes technology segment projected to grow 11.7%.

Financial Guidance and Earnings Performance

Abbott reported second-quarter adjusted earnings per share of $1.31 and revenue of $12.593 billion, leading the company to raise its full-year adjusted EPS guidance to $5.45–$5.60.

These financial results underscore the resilience of Abbott's diversified business model, which spans medical devices, diagnostics, nutritional products, and established pharmaceuticals. The upward revision in earnings guidance signals sustained demand for continuous glucose monitoring systems and cardiovascular medical equipment.

Resolving Legal Headwinds

Beyond operating metrics, the company recently addressed a significant legal overhang. Abbott reached a settlement with the Department of Justice regarding claims from its 2022 infant formula recall, agreeing to pay $385 million without admitting fault.

The resolution of the Department of Justice investigation removes a regulatory cloud that has weighed on investor sentiment since the Sturgis, Michigan plant shutdown. With the legal matter settled, institutional analysts are increasingly focusing on underlying organic revenue expansion.

Medical Devices Drive Multi-Year Outlook

The projected 10.6% organic growth in Medical Devices highlights the segment's role as the primary catalyst for Abbott's valuation. Within that division, diabetes care remains the standout performer, supported by accelerating adoption of advanced sensor-based glucose monitors.

As healthcare providers resume elective procedures at pre-pandemic rates, device makers with strong institutional footprints are capturing market share. Rothschild Redburn's revised $127 price target reflects this device-led momentum heading into the upcoming fiscal periods.