Should You Buy, Hold or Sell ABT Stock Amid Medical Devices Boom?

Abbott Laboratories’ ABT Medical Devices remains its largest segment and continues to benefit from a strong pipeline of new product launches and growing adoption across cardiovascular care and diabetes management. The segment is well positioned to capitalize on the expanding global medical devices market.

According to Fortune Business Insights, the global medical devices market was valued at $572.31 billion in 2025 and is projected to increase from $604.99 billion in 2026 to $1.03 trillion by 2034, reflecting a CAGR of 6.9% over the forecasted period.

Given this favorable industry backdrop, Abbott’s Medical Devices business maintained solid momentum in the second quarter of 2026, with sales increasing 8.4% on a comparable basis. Electrophysiology sales advanced 13.4%, while Rhythm Management, Heart Failure and Diabetes Care each delivered high-single-digit comparable growth. Notably, continuous glucose monitoring sales exceeded $2 billion, supported by the scale of Abbott’s FreeStyle Libre franchise and its expanding adoption.

Despite these encouraging growth trends, the broader Medical Devices sector continues to face macroeconomic headwinds, including policy uncertainty, persistent cost inflation and tariff-related pressures. These factors could weigh on operating costs and investor sentiment across the industry.

Abbott shares have lost approximately 17.9% over the past year compared with a 23.9% decline for the broader Medical Products industry. During the same period, shares of key peers Boston Scientific BSX and GE HealthCare Technologies GEHC have declined 52% and 1.7%, respectively.

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Major Tailwinds for ABT Stock

EPD Momentum Across Emerging Markets: Abbott’s Established Pharmaceuticals Division (“EPD”) remains a steady contributor, supported by branded generics positions in faster-growing geographies. In the second quarter of 2026, EPD sales increased 8.4% on a reported basis and 8.7% on a comparable basis. 

Key emerging markets grew 10.7% on a comparable basis, led by double-digit growth in several countries across Latin America and Asia Pacific. The company is also expanding its biosimilar pipeline, which should deepen the portfolio in key markets. It expects EPD to sustain high-single-digit sales growth over time, supported by broad geographic demand, brand equity and disciplined commercial execution.

Innovation-Led Reset in Nutrition: Abbott is working through a transition in Nutrition that is intended to restore a healthier balance between price and volume over time. In the second quarter of 2026, Nutrition sales increased $127 million sequentially as both Pediatric and Adult Nutrition improved. International Pediatric Nutrition returned to growth, rising 6.4% on a comparable basis, while recent Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”) contract wins lifted Abbott to the leading position in both WIC and non-WIC channels. 

In Adult Nutrition, U.S. retail consumption of Ensure increased at a double-digit rate from 2025-end levels, and international sales approached prior-year levels. New Ensure products with higher protein, lower sugar and refreshed packaging are also contributing. The company expects pricing actions, new products and commercial execution to support continued improvement in the second half of 2026.

Estimates for ABT Heading North

The Zacks Consensus Estimate for Abbott’s 2026 sales and EPS implies a year-over-year improvement of 13.5% and 9.2%, respectively. The bottom-line estimates have shown upward movement in the past 30 days.

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ABT’s Downsides

China Policy Risk Persists: China remains a source of uncertainty, particularly within Core Laboratory Diagnostics where volume-based procurement (VBP) has affected pricing and sales. Abbott mentioned that the China business had declined around 30% for at least five quarters before entering easier comparisons. 

The company still expects China Core Laboratory sales to decline a mid-single-digit rate in the second half of 2026. Future procurement rounds or policy changes could again alter pricing and demand visibility. This risk limits the extent to which broader Core Laboratory demand can drive segment growth and contributes to uneven geographic performance.

Margin and Cost Variability: The company faces a higher expense base following the Exact Sciences acquisition. Reported research and development expense increased 22.9%, while selling, general and administrative expense rose 30.3% from the prior-year quarter, partly reflecting acquisition-related items. 

Abbott is also absorbing intangible amortization and other transaction costs while investing in new products and manufacturing capacity. While management expects gross-margin expansion to support its raised 2026 adjusted EPS guidance of $5.45-$5.60, weaker pricing, product mix or volumes, particularly in the Nutrition or Diagnostics businesses, could make it more difficult to absorb these higher costs.

ABT Stock Valuation

With a forward five-year price-to-sales (P/S) of 3.53X, Abbott’s shares are trading expensive compared with the industry average of 2.23X. It has a Value Score of C at present.

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How to Play ABT Stock?

Abbott’s strong Medical Devices momentum, expanding EPD business, improving Nutrition trends and positive earnings estimate revisions provide a solid foundation for growth. However, persistent China-related policy uncertainty, elevated costs and broader macroeconomic pressures remain key concerns. Continued execution across its high-growth businesses and successful management of these headwinds will be crucial to sustaining Abbott’s growth trajectory and improving investor sentiment.

Given the valuation trend, estimates and stock price, we advise investors who already hold this Zacks Rank #3 (Hold) stock to maintain their positions, while prospective investors may consider waiting for a more favorable entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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