Shares dropped 4.3% to $98.00 after Abbott Laboratories announced it will spin off its Nutrition business into a standalone public company by late 2027 — while simultaneously lowering its 2026 sales-growth forecast. Third-quarter revenue of $13.01 billion edged past the consensus estimate, and adjusted EPS of $1.42 matched Wall Street expectations. Yet investors zeroed in on what's slowing down, not what beat.
• The Growth Forecast Got Smaller, and That Matters More Than the Earnings Beat
Abbott now expects 2026 sales growth of about 6%, down from its prior range of 6.5% to 7.5%.
The cut came after softer-than-expected demand for medical devices — the segment Wall Street counts on as Abbott's main engine. Medical device sales grew 6.9% to $5.83 billion but missed analysts' $5.88 billion estimate, with JPMorgan flagging softer growth in electrophysiology, a heart-rhythm treatment area. When your fastest horse stumbles, it drags the whole forecast with it.
• Nutrition Has Been a Drag — Now It's Getting Its Own Address
The new nutrition company will carry approximately $8.5 billion in annual sales and brands like Similac, Ensure, and Pedialyte. But the division has been struggling: volume was pressured by higher manufacturing costs and the loss of a U.S. WIC government contract , a program that accounts for over half of U.S. infant formula purchases. Q3 nutrition sales did grow 5.1% to $2.26 billion , a marked improvement, but the unit still weighed on margins. Spinning it off lets post-separation Abbott market itself as a pure-play in devices and diagnostics — businesses that typically command richer stock valuations.
• The EPS Guidance Held Firm — A Signal Management Isn't Panicking
Abbott reaffirmed its full-year adjusted EPS guidance, tightening the range to $5.50–$5.55.
Fourth-quarter EPS is projected at $1.62 to $1.67. At today's $98 price and ~$5.53 midpoint EPS, the stock trades at roughly 17.7x forward earnings — a discount to its historical average for a company that just posted a 14.4% year-over-year revenue increase.
• Execution Risk Is the Real Story for the Next 14 Months
The deal requires regulatory approvals, a Form 10 registration, and final board sign-off. Separations of this size consume management attention and incur one-time costs. If device growth re-accelerates and the nutrition unit stabilizes before separation, shareholders could benefit from owning two focused companies. If either falters, the discount deepens.