Baird began coverage of Abbott Laboratories with an "Outperform" recommendation and a $121 price target, arguing the diversified healthcare company is positioned to deliver stronger earnings growth over the coming years even as it navigates short-term headwinds.
The brokerage expects Abbott to produce 6% to 8% annual revenue growth and low-double-digit earnings growth, supported by its market-leading positions across medical devices, diagnostics, nutrition and established pharmaceuticals. Baird noted that diagnostics-related pressure in China and weaker demand for respiratory testing should ease, and that the roll-out of new products plus integration of Exact Sciences will help improve growth beginning in 2027.
Device franchise and pipeline
Baird highlighted Abbott's medical devices business - which represents roughly 47% of sales - as a primary growth engine, forecasting 8% to 10% annual expansion in that segment. The brokerage pointed to sustained demand in electrophysiology and continuous glucose monitoring, plus momentum in structural heart devices. It also flagged specific product-level upside potential from items including VOLT, TactiFlex Duo, TriClip, Aveir and Libre Duo, as well as opportunities from broadened reimbursement.
Portfolio resilience and Exact Sciences acquisition
Beyond devices, Baird emphasized Abbott's exposure to nutrition, diagnostics and established pharmaceuticals as a source of resilience for the overall business. The firm said Abbott's purchase of Exact Sciences expands its footprint in colorectal cancer screening and creates longer-term prospects in multi-cancer early detection and molecular residual disease testing.
Baird modeled revenue growth toward the lower end of Abbott's 2026 guidance range, while expecting a pick-up in sales in the second half of the year. The brokerage anticipates recovery in diabetes, electrophysiology and diagnostics franchises, alongside growing contributions from Exact Sciences as integration progresses and the acquired business contributes more meaningfully.
Earnings and valuation
On a per-share basis, Baird projects adjusted earnings of $5.46 in 2026 and $6.05 in 2027. The $121 price target is derived from applying a 20-times multiple to its 2027 earnings estimate, with the firm citing Abbott's above-peer growth outlook and robust product pipeline as justification. Baird also noted that Abbott's valuation should improve as earnings growth resumes following temporary dilution stemming from the Exact Sciences acquisition.
Bottom line
Baird's initiation frames Abbott as a company with diversified revenue streams and a deep product pipeline, with the medical devices segment and the Exact Sciences deal central to its medium-term growth thesis. Near-term challenges tied to diagnostics and respiratory testing temper expectations, but the brokerage expects momentum to return and for earnings to accelerate into 2027.