Here's What Is Shaping Abbott's Diagnostics Growth

Abbott Laboratories’ ABT Diagnostics business continues to face some near-term variability from the seasonal nature of respiratory testing, even as its underlying routine-testing and cancer franchises remain healthy. In the second quarter of 2026, Rapid and Molecular Diagnostics sales declined 8% on a comparable basis, driven by the anticipated falloff in respiratory virus testing following a weaker-than-normal respiratory season. This creates a difficult mix dynamic because fluctuations in flu, COVID-19 and other respiratory testing volumes can meaningfully affect quarterly growth despite relatively stable demand elsewhere in the Diagnostics business.  

However, the Cancer Diagnostics arm helped offset the weakness in respiratory testing. The segment’s sales grew 13% in the second quarter, driven by mid-teens growth in Cologuard. Growth also came from new and repeat Cologuard users, along with contributions from precision oncology and international markets. Accordingly, Abbott’s Diagnostics outlook is increasingly supported by Cancer Diagnostics rather than respiratory testing.

Thus, even with solid routine laboratory demand and expanding oncology testing, the segment’s quarterly growth rate can remain uneven because the timing and severity of respiratory outbreaks are difficult to forecast.

Peer Update

Respiratory testing remains a swing factor for QuidelOrtho’s QDEL revenues, mix and cash conversion. For the first six months of 2026, respiratory products accounted for 9% of total revenues compared with 13% in the prior-year period, as weaker flu and COVID-19 demand weighed on results. Although second-quarter 2026 Point of Care revenues increased 16% year over year, management said respiratory positivity rates remained markedly below 2025 levels.

Softness in the molecular diagnostics business due to sluggish demand for respiratory disease tests has been weighing on the performance of the Danaher’s DHR Diagnostics segment. Volume-based procurement and increased reimbursement changes in China are concerning as well. The segment’s core revenues declined 4% on a year-over-year basis in the first quarter of 2026. However, solid momentum in the clinical diagnostics businesses, led by growth in the Beckman Colter Diagnostics unit, has been buoying the segment. 

ABT Price Performance

In the past year, Abbott shares have plunged 11.6% compared with the industry’s 22.9% decline. 

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Expensive Valuation

ABT currently trades at a forward 12-month Price-to-Sales (P/S) of 3.81X compared with the industry’s median of 2.81X.

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ABT Stock Estimate Trend

In the past 30 days, ABT’s EPS estimate for 2026 has remained unchanged.

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ABT stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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