Abbott Laboratories has quietly slipped behind the broader market, even as mega-cap healthcare names typically serve as defensive anchors in volatile environments. With shares down 8.6% year to date and 15.1% over the past 12 months, the company has materially underperformed the Nasdaq Composite, which has declined just 1.6% year to date and remains up 18.6% over the same period. For a $200+ billion medical devices and healthcare conglomerate, that divergence raises a key question: Is this weakness structural — or cyclical?

Technical and Fundamental Pressures Converge

Abbott Laboratories has been trading below both its 50-day and 200-day moving averages since mid-October 2025, reinforcing the negative momentum trend. Technical weakness has been accompanied by operational headwinds, particularly within its nutrition segment.

The loss of a major U.S. WIC contract and ongoing consumer price sensitivity have pressured volume growth. CEO Robert Ford acknowledged that the current trajectory is unsustainable and indicated strategic adjustments are underway. Management expects nutrition to remain under pressure through mid-year, while banking on medical devices and diabetes care innovations to drive recovery.

The fourth-quarter earnings release amplified investor concerns. While adjusted EPS of $1.50 met expectations, revenue of $11.5 billion fell short of the $11.8 billion consensus forecast. Markets responded swiftly, sending shares down more than 10% following the report. For full-year guidance, Abbott projects adjusted EPS between $5.55 and $5.80, signaling moderate growth but limited acceleration.

Relative Performance in a Competitive Landscape

Despite its recent underperformance, Abbott remains comparatively resilient within the medical devices sector. Boston Scientific Corporation, for example, has declined 28% over the past year and 21.2% year to date, reflecting broader pressure across device manufacturers.

Abbott’s diversified portfolio — spanning diagnostics, medical devices, established pharmaceuticals, and nutrition — offers strategic insulation that pure-play competitors lack. Its global presence across more than 160 countries further mitigates geographic concentration risk, particularly relevant for Israeli and U.S. institutional investors seeking healthcare exposure without single-market dependence.

Crucially, Abbott continues to invest heavily in research and development, supporting pipeline expansion in diabetes monitoring and cardiovascular technologies. These higher-margin device categories could offset softness in lower-margin nutrition operations.

Valuation and Analyst Sentiment

From a valuation perspective, sentiment appears more constructive than price action suggests. Wall Street maintains a consensus “Strong Buy” rating based on coverage from 28 analysts, with a mean price target of $134.38 — implying approximately 17% upside from current levels.

The disconnect between market performance and analyst optimism often reflects transitional earnings cycles rather than permanent impairment. Investors may be applying a temporary discount to reflect near-term margin pressure while awaiting clearer signs of stabilization.

Looking ahead, the key catalysts will include nutrition segment recovery, device launch traction, and margin expansion in higher-growth categories. If management executes effectively, current weakness could represent a re-rating opportunity rather than sustained underperformance.

For now, Abbott stands at a crossroads: either reaffirming its defensive mega-cap status or continuing to lag as investors rotate toward faster-growth healthcare innovators.