Wolfe Research downgrades Stryker, upgrades Abbott in med-tech shuffle

Investing.com -- Wolfe Research made two rating changes across large-cap medical devices, downgrading Stryker while upgrading Abbott Laboratories on Thursday.

Analyst Mike Polark cut Stryker to Peer Perform, citing a demanding second-half setup following the company's March cyber disruption.

He said the June quarter "wasn't a huge catch up thus year not yet de-risked," leaving "a higher-than-normal burden on 2H to deliver."

As a result, Wolfe sees the near-term skew to estimates "leans negative," with growth "more likely to slow to 8% vs speed up to 10% in 2027."

The firm flagged that Stryker's guidance implies 54% of full-year revenue must come in the second half, above the 52% to 53% averaged from 2017 to 2025 excluding 2020. With valuation "near never higher levels of last 15 years," Wolfe views the 22 times earnings multiple as "fair" and risk/reward as balanced.

On Abbott, Polark upgraded the stock to Outperform, with a $130 price target, saying the 2027 setup seems better.

He pointed to six catalysts, including "offense in Electrophysiology" as the Volt PFA catheter moves to full U.S. launch, and a recovery in Libre continuous glucose monitors back toward 10%-plus growth on easy comps and potential Medicare coverage.

Polark also argued cost synergies from the Exact Sciences deal were "under-guided," and flagged easier comparisons ahead in nutrition and China core lab.

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