Abbott Laboratories has returned to the center of investor debate after Freedom Capital Markets upgraded the healthcare giant’s stock to Buy, even as near-term performance remains under pressure. The move comes at a delicate moment for the shares, which are trading just above their 52-week lows following a disappointing fourth quarter. For markets, the question is whether current weakness reflects a cyclical dip—or a mispricing ahead of a strategic inflection driven by Abbott’s pending acquisition of Exact Sciences.

A Contrarian Upgrade at a Sensitive Price Level

Freedom Capital Markets’ decision to upgrade Abbott Laboratories stands out because it comes alongside a lower price target. While the firm reduced its target to $120 from $130 to reflect softer near-term fundamentals, it simultaneously argued that the stock’s recent correction has created a more compelling risk-reward profile. With shares trading near $105, valuation has compressed to levels that analysts increasingly see as discounting too much bad news.

This approach reflects a common dynamic during transitional periods: short-term earnings pressure can overshadow longer-term strategic value, particularly in diversified healthcare businesses where growth drivers do not move in lockstep.

Segment Divergence Defines the Near Term

Abbott’s latest earnings highlighted a familiar split across its portfolio. Weakness in the Nutrition segment weighed heavily on results, and management has signaled that pressure is likely to persist through the first half of the year. Diagnostics has also softened, contributing to a cautious tone among several research firms.

At the same time, Medical Devices and Established Pharmaceuticals continue to act as stabilizing forces. These divisions remain the company’s core revenue engines, benefiting from structural demand in cardiovascular care, diabetes management, and emerging markets. The ability of these segments to offset underperforming units is central to the investment case and underpins confidence that the current slowdown is not systemic.

Exact Sciences as a Strategic Reset

The upgrade hinges largely on Abbott’s agreement to acquire Exact Sciences, a deal expected to close in the second quarter. Freedom Capital Markets described Abbott’s 2026 organic growth guidance of 6.5–7.5% as conservative, arguing that integration synergies and pipeline expansion could drive upside beyond current forecasts.

From a strategic perspective, the acquisition deepens Abbott’s diagnostics footprint and positions it more squarely within preventive and oncology-focused testing—areas with durable, long-term demand. For investors, this reframes Abbott not just as a defensive healthcare name, but as a company actively reshaping its growth mix after the post-pandemic normalization.

Wall Street Adjusts Expectations

Freedom’s upgrade contrasts with a broader pattern of downward price-target revisions across the Street. Several banks have lowered targets following the earnings miss, citing softer sales trajectories and uncertainty around near-term execution. Yet notably, many of those firms have maintained Buy or Outperform ratings, signaling that confidence in Abbott’s franchise remains intact despite earnings volatility.

This divergence highlights a psychological shift: the debate has moved from whether Abbott can grow, to how quickly growth reaccelerates after a reset year.

What to Watch Next

Looking ahead, investor focus will likely center on three variables: execution in Nutrition as pricing and volume pressures evolve, early signals from the Exact Sciences integration, and whether Medical Devices can sustain high-single-digit growth in a more normalized healthcare environment. If integration progress materializes as expected, current valuation levels may come to be viewed as an entry point rather than a warning sign.