We saw how “Sell America” went into full swing in Tuesday (20 Jan) trading session, major indices like DJIA lost 870 points, S&P 500 drops 2% for worst day since October on Trump tariff threat over Greenland.
With the Q4 earnings season coming for most major names, I think we can look at some of the sector which seems to be affected the least, one of them is Healthcare.
One of names we can look at is $Abbott Laboratories(ABT)$ upcoming Fiscal Q4 2025 earnings which is estimated to be on Thursday, January 22, 2026 (Before Market Open).
Earnings Release Details
Consensus EPS Estimate: $1.50 (implying ~11.9% year-over-year growth)
Consensus Revenue Estimate: $11.79 Billion (implying ~7.5% year-over-year growth)
Based on the Fiscal Q3 2025 report released in October 2025, here is a summary of Abbott Laboratories' performance and an analysis of the "lesson" investors took from the guidance.
Executive Summary: Fiscal Q3 2025 Earnings
Abbott delivered a "mixed" report where exceptional strength in its core growth engine (Medical Devices) was partially offset by legacy headwinds in Diagnostics.
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Release Date: October 15, 2025
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Adjusted EPS: $1.30 (Met Consensus Estimates)
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Revenue: $11.37 Billion (Missed Consensus of $11.40 Billion slightly)
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Organic Sales Growth: +7.5% (excluding COVID-19 testing impacts)
Segment Performance Scorecard
The Guidance "Lesson Learnt"
The market reaction to the Q3 report was negative (stock fell ~3-4% immediately post-print). The "lesson" for investors lies in how the market interpreted the guidance relative to the segment mix.
The Guidance Provided:
FY 2025 EPS: Range narrowed to $5.12 – $5.18 (Midpoint maintained, not raised).
2026 Preliminary Outlook: Management stated they were "comfortable" with early Wall Street consensus (High single-digit revenue growth, double-digit EPS growth).
The Critical Lesson: "Diversification Cuts Both Ways"
The key takeaway from Q3 2025 was that Abbott's conglomerate structure—usually a safety net—acted as an anchor.
1. The "Beat and Maintain" Penalty:
Investors learned that Medical Devices alone cannot carry the stock if other segments are dragging. Despite Medical Devices growing at a blistering 12.5% pace (which would usually trigger a guidance raise), the gains were completely neutralized by the slump in Diagnostics.
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Lesson: When analyzing ABT, do not just look at the FreeStyle Libre growth numbers. You must calculate if the MedTech "beat" is large enough to subsidize the losses in Diagnostics. In Q3, it wasn't.
2. The "China Drag" is Sticky:
The guidance revealed that the issues in China (specifically Volume-Based Procurement in Diagnostics) were not temporary blips but persistent structural resets.
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Lesson: Management's conservatism in not raising the full-year midpoint despite a MedTech boom signaled that they expect the China headwinds to persist into Q4 2025 and potentially early 2026.
3. "In-Line" is "Bad News" for Premium Stocks:
Abbott trades at a premium valuation compared to many peers because of its reliability.
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Lesson: When a premium stock merely "meets" earnings and "narrows" guidance (rather than raising it), the premium evaporates. The market viewed the lack of an upside surprise as a reason to sell, rotating capital into "purer" MedTech plays (like Boston Scientific or Stryker) that didn't have the Diagnostics baggage.
Key Metrics & Segments to Watch
Investors should focus less on the headline "beat" and more on the quality of growth in specific high-margin segments.
A. Medical Devices (The Primary Growth Engine)
This segment is the stock's main valuation driver.
Diabetes Care (FreeStyle Libre): This is the single most important product line. Analysts expect ~15.5% growth in this sub-segment.
What to watch: Any deceleration in Libre sales growth (especially in the U.S.) will be viewed negatively. Look for updates on Libre 3 uptake and integration with insulin pumps.
Electrophysiology: Watch for performance metrics on the Volt PFA (Pulsed Field Ablation) system. This is a hot technology area in cardiac care; early success here is critical to compete with Boston Scientific and Medtronic.
Structural Heart: Look for growth in MitraClip and TriClip sales. Double-digit growth here is expected to justify the stock's premium multiple.
B. Nutrition
Adult Nutrition (Ensure/Glucerna): This has been a steady performer. Expect continued mid-single-digit growth driven by aging demographics.
Pediatric Nutrition (Similac): Watch U.S. sales closely. Analysts are currently forecasting a slight decline (~3%). Positive Surprise Potential: If this segment returns to positive growth in the U.S., it would remove a lingering overhang on the stock.
C. 2026 Full-Year Guidance
Since this is the Q4 report, the market's reaction will be dictated by the 2026 Outlook.
The "Magic Number": Wall Street is looking for initial 2026 EPS guidance in the range of $5.60 – $5.70.
Risk: If management guides conservatively (e.g., $5.50 - $5.60), the stock likely sells off, even if Q4 2025 numbers were good.
Abbott Laboratories (ABT) Price Target
Based on 27 analysts from Tiger Brokers app offering 12 month price targets for Abbott Laboratories in the last 3 months. The average price target is $144.08 with a high forecast of $169.00 and a low forecast of $122.34. The average price target represents a 18.93% change from the last price of $121.14.
Short-Term Trading Opportunity
Current Technical Sentiment: Neutral to Bearish ABT shares have recently been lagging the broader market and are trading below key moving averages (the 50-day and 200-day), suggesting weak momentum heading into the print.
Historical Post-Earnings Behavior
Abbott has a history of "sell the news" reactions. Even when beating estimates, the stock often stays flat or dips 1-3% immediately following the release as traders take profits on the "safe haven" trade.
Trading Scenarios
Scenario A: The "Dip Buy" (High Probability)
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Setup: ABT reports a solid beat but offers conservative 2026 guidance, causing the stock to drop 2-4%.
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Action: Look for support around $116 - $118. This has historically been a strong accumulation zone. A bounce from this level back toward $124 is a classic post-earnings swing trade for ABT.
Scenario B: The "Breakout" (Lower Probability)
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Setup: ABT reports huge growth in Medical Devices (>15%) AND raises 2026 guidance aggressively.
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Action: Wait for a confirmed close above $126 (the 50-day moving average). Entering before this confirmation is risky given the current downtrend.
Investors Traders Verdict
For Investors: Hold. The fundamentals remain strong, particularly in Medical Devices.
For Traders: Avoid buying pre-earnings. The risk/reward favors waiting for a potential knee-jerk sell-off to $116-$118 to enter long positions for a recovery trade.
Technical Analysis - Exponential Moving Average (EMA)
If we looked at how ABT have traded after its previous Q3 earnings which we saw Abbott trades at a premium valuation compared to many peers because of its reliability.
So we might want to understand that when a premium stock merely "meets" earnings and "narrows" guidance (rather than raising it), the premium evaporates. We can see that there is a selling off because the market viewed the lack of an upside surprise as a reason to sell, rotating capital into "purer" MedTech plays.
So at the current price for ABT looks attractive, and they have declined pretty least amidst last night’s broad sell-off, this might be a time to consider this stock but I will watch how ABT would be trading today (21 Jan) before its earnings tomorrow (22 Jan) as it is currently still in negative RSI momentum trend.
Summary
Abbott Laboratories (ABT) Q4 2025 Earnings Analysis
Release Date: Thursday, January 22, 2026 (Pre-Market)
Consensus Estimates: EPS $1.50 (+11.9% YoY) | Revenue $11.79B (+7.5% YoY)
1. Core Fundamental Setup
Investors should expect a "tale of two companies." The Medical Devices segment is the primary engine, projected to grow ~12.5%, driven by high demand for FreeStyle Libre (Diabetes) and Electrophysiology products. Conversely, Diagnostics remains a drag, struggling with negative comparisons from lost COVID-19 revenue and pricing pressure in China (VBP).
Success depends on whether Medical Device strength can overshadow these legacy headwinds. The critical wildcard is the 2026 Full-Year Guidance. Wall Street is looking for an initial EPS forecast of $5.60–$5.70. Anything lower—likely due to persistent China issues or legal conservatism regarding ongoing NEC formula lawsuits—will be punished.
2. Key Metrics to Watch
Medical Devices Growth: Needs to exceed 12% to justify the current valuation.
China Diagnostics: Look for stabilization. Continued double-digit declines here would signal a structural problem rather than a temporary one.
2026 EPS Outlook: This matters more than the Q4 beat. A guide below $5.60 is a sell signal.
3. Trading Opportunity: "Fade the Pop, Buy the Drop"
Sentiment: Neutral to Bearish. ABT has lagged the broader market recently, trading below key moving averages.
Strategy: Abbott stock frequently experiences a "sell the news" reaction.
Short-Term: Avoid buying pre-earnings. The risk/reward is poor given the high expectations for the Medical Devices segment.
Post-Earnings Entry: If the stock dips on conservative guidance, look for a reversal entry at major support around $116–$118. This zone has historically attracted strong institutional buying for a recovery trade back toward $124.
Appreciate if you could share your thoughts in the comment section whether you think ABT would be able to reverse the selling pressure if the earnings result came in just inline, but would we see a recovery buying at this current price?
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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