ABBOTT LABORATORIESABT

Abbott Laboratories' $20.6 billion^a acquisition of Exact Sciences in Q1 2026 signals a definitive end to its pandemic-era identity. By issuing $20 billion in debt to capture the cancer diagnostics market, the company proved it is aggressively pivoting toward its next wave of structural expansion. The core investment thesis is clear: despite a multi-year secular drag from vanishing COVID-19 test revenue, Abbott’s underlying Medical Devices portfolio—anchored by continuous glucose monitors—has consistently driven the business back to sustainable, organic growth.

Navigating the post-pandemic hangover required a massive internal rotation, reflected in how earnings per share contracted from the testing-fueled peak of $3.94^b in FY2021 to a more normalized $3.72 in FY2025. Over that span, the company absorbed severe headwinds, including a 63.3% drop in Rapid Diagnostics sales in FY2023 and a volatile U.S. infant formula recall. Yet, Abbott successfully replaced those lost revenues with core medical technology sales, pushing total net sales to $44.3 billion in FY2025. The Medical Devices segment experienced 12.6% growth that year, supercharged by its FreeStyle Libre diabetes franchise, which generated $6.4 billion in sales during FY2024. The market has largely rewarded this successful transition away from pandemic windfalls; at the close of FY2025, Abbott traded at 33.7x earnings with a share price of $125.29.