To The Moon

$Abbott Laboratories(ABT)$ is expected to announce its fiscal Q2 2025 earnings on Thursday, July 17, 2025, before the market opens.

Adjusted EPS: Analysts expect adjusted EPS of approximately $1.25 to $1.27, which aligns with Abbott's own guidance and would represent a year-over-year increase of about 9.7% to 11.4%.

Revenues: Projected revenues are around $11.02 billion to $11.07 billion, indicating a year-over-year increase of about 6.1% to 6.7%.

Summary of Abbott Laboratories (ABT) Fiscal Q1 2025 Earnings:

Abbott Laboratories delivered a strong Q1 2025, exceeding analyst expectations for adjusted earnings per share and reaffirming its full-year guidance, demonstrating the strength of its diversified business model.

Total Sales: $10.4 billion, reflecting a 4.0% reported increase and a robust 6.9% organic growth year-over-year. Excluding COVID-19 testing-related sales, organic growth was an even more impressive 8.3%.

Adjusted Diluted EPS: $1.09, which beat the Street consensus of $1.07 and marked double-digit growth compared to the prior year. GAAP diluted EPS was $0.76.

Segment Performance Highlights (Organic Growth):

Medical Devices: The standout performer, with sales increasing almost 13% organically. This was driven by a nearly 20% organic increase in Diabetes Care sales (led by FreeStyle Libre), and strong growth in Structural Heart (14.7% organic) and Heart Failure (11.2% organic).

Nutrition: Sales increased 6.8% organically, with strong performance in Adult Nutrition (8.7% organic) led by Ensure® and Glucerna®. Pediatric Nutrition also showed growth.

Established Pharmaceuticals (EPD): Demonstrated strong performance with 7.8% organic growth, particularly in Key Emerging Markets (9.3% organic).

Diagnostics: While global sales decreased on a reported basis (7.2%), and 4.9% on an organic basis, this was primarily due to the year-over-year decline in COVID-19 testing-related sales. Excluding COVID-19 tests, diagnostics sales grew 0.5% organically, benefiting from demand for top-tier systems and increased routine testing. COVID-19 testing sales dropped significantly from $204 million in Q1 2024 to $84 million in Q1 2025.

Margins: Adjusted gross margin improved by 140 basis points to 57.1%, and adjusted operating margin expanded by 130 basis points to 21.0%, indicating effective cost management and a favorable product mix.

Guidance: Abbott reaffirmed its full-year 2025 financial guidance, projecting organic sales growth of 7.5% to 8.5% and adjusted diluted EPS of $5.05 to $5.25. They also provided Q2 2025 adjusted EPS guidance of $1.23 to $1.27.

Factors and Metrics to Watch for Abbott Laboratories (ABT) Fiscal Q2 2025 Earnings:

Investors will be looking for continued momentum in key growth areas and how Abbott manages the ongoing decline in COVID-19 testing revenue.

Key Analyst Estimates (Consensus):

Medical Devices Segment Performance:

Diabetes Care (FreeStyle Libre): This is a critical growth driver. Investors will watch for continued strong adoption of its continuous glucose monitoring (CGM) systems, particularly the FreeStyle Libre portfolio. Organic growth for this sub-segment will be a key metric. Analysts are forecasting a 17.5% year-over-year increase in Diabetes Care sales.

Structural Heart & Heart Failure: These areas have shown robust growth. Continued strong performance in surgical valves, structural interventions, transcatheter repair and replacement products, and heart assist devices will be important. Analysts project Medical Device segment revenues to improve 10.9% year-over-year.

Neuromodulation and Vascular: Look for contributions from new product launches (e.g., next-generation delivery systems in Neuromodulation) and continued adoption of products like Esprit (below-the-knee resorbable stent) in Vascular.

Diagnostics Segment - Managing the COVID-19 Testing Decline:

Non-COVID Growth: The primary focus will be on the organic growth of the Diagnostics segment excluding COVID-19 testing-related sales. Q1 saw a modest 0.5% organic growth here. Investors will want to see this trend improve, driven by widespread adoption of Abbott's core lab systems and high demand for routine diagnostic testing.

Core Laboratory Diagnostics: Growth here is crucial. Watch for continued global demand for immunoassay, clinical chemistry, hematology, and blood screening testing panels.

Volume-Based Procurement (VBP) in China: The impact of VBP programs in China on Diagnostics sales remains a factor. Commentary on this will be important. Analysts are projecting a modest 1% year-over-year increase for the entire Diagnostics segment.

Nutrition Segment:

Adult Nutrition: Continued strong sales of Ensure® and Glucerna® brands are expected.

Pediatric Nutrition: While ZonePerfect® was discontinued in March 2024, growth in other infant formula and toddler brands in the U.S. portfolio will be monitored. Analysts estimate a 4.3% year-over-year improvement in the Nutrition segment's revenues.

Established Pharmaceuticals (EPD):

Key Emerging Markets: Continued double-digit organic growth in these markets (across Asia, Latin America, and the Middle East) is expected to drive the segment's performance. Analysts are looking for a 6.1% year-over-year increase in EPD revenues.

Profitability and Margins:

Adjusted Gross and Operating Margins: Investors will assess if the margin expansion observed in Q1 (due to favorable product mix and cost management) continues into Q2. This indicates the company's ability to drive efficiencies and maintain pricing power.

Full-Year 2025 Guidance:

Reaffirmation: Given that Q1 saw a reaffirmation of the full-year guidance, investors will be looking for continued confidence from management in hitting its organic sales growth target of 7.5% to 8.5% and adjusted EPS of $5.05 to $5.25. Any slight adjustments could signal changes in market conditions or internal outlooks.

Strategic Investments: The $500 million investment in manufacturing and R&D in Illinois and Texas is expected to go live by year-end 2025 and mitigate tariff impacts. Updates on these strategic investments will be watched.

Abbott Laboratories (ABT) Price Target

Based on 21 Wall Street analysts offering 12 month price targets for Abbott Laboratories in the last 3 months. The average price target is $143.47 with a high forecast of $159.00 and a low forecast of $120.12. The average price target represents a 9.11% change from the last price of $131.49.

Technical Analysis - Exponential Moving Average (EMA)

Abbott Laboratories (ABT) is trading lower ahead of its July 17 earnings due to historical patterns of post-earnings declines—60% of the past 20 quarters saw negative one-day returns, with a median drop of 2.4%.

Analysts have slightly revised down Q2 EPS estimates, and concerns linger over slower earnings growth versus industry peers. Additionally, past tax benefits may have overstated profitability, prompting caution despite strong fundamentals.

Though we are seeing the momentum remain strong and positive, the bulls have lost control, the bears are now in a position to make downwards movement, this could mean that ABT could see its share price trending downside even though they might be able to provide a robust performance of its growth drivers.

Summary

Abbott's diversified portfolio provides resilience, and its Medical Devices segment, particularly Diabetes Care, is a clear growth engine. The key for Q2 will be the continued robust performance of its growth drivers and how effectively it navigates the ongoing decline in COVID-19 testing sales and other market dynamics.

Appreciate if you could share your thoughts in the comment section whether you think ABT would be able to provide continued robust performance of its growth drivers despite the headwinds of tariffs that could hit the pharma industries, both sectoral and country -based tariffs.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire 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.