Like others in this select MedTech group, Abbott is consistently delivering top-tier revenue growth and operating financial leverage, while generating significant cash flow. We apply a multiple of 27-28x 2026E EPS (or a range of $152-$158), more in-line with other high-growth MedTech given the company’s strong free cash flow and product pipeline, and arrive at our target price of $155.

Risks to our target price include: 1) the overall health of the medical technology market, including pricing and hospitalization trends; 2) the competitive landscape, namely in its Diabetes, Diagnostic and Structural Heart franchises; 3) new product approvals; 4) emerging market strategy and the global economy; 5) leverage of the income statement; 6) use of cash; 7) management execution; and 8) the pending infant formula litigation.

Positive or adverse developments in these risk factors could cause the share price to remain above or fall below our target price.