Investors in Abbott Laboratories are grappling with a stark dichotomy. On one hand, the company’s core diabetes division continues to post impressive revenue forecasts, attracting increased investment from major funds. On the other, a severe safety warning from the U.S. Food and Drug Administration (FDA) concerning its flagship product has introduced significant uncertainty. The market must now balance robust growth figures against acute reputational and operational risk.
Institutional Investors Show Diverging Strategies
The tension between these financial opportunities and emerging risks is clearly visible in the recent activity of large-scale investors. Regulatory filings from February 19, 2026, revealed opposing moves:
* The Vanguard Russell 1000 Index Fund expanded its holding, adding over 6,000 shares.
* Conversely, Hemenway Trust Co LLC reduced its exposure by selling approximately 3.1 percent of its position.
This lack of consensus underscores the market’s ongoing assessment of how profoundly the FDA’s intervention might impact Abbott’s long-term business model.
FreeStyle Libre 3 Recall Classified as Most Serious
At the center of the storm is the FreeStyle Libre 3 continuous glucose monitoring system. In early February 2026, the FDA categorized a recall for certain sensors as Class I, its most critical designation. This action was based on data from early January linking the device to 860 serious injuries and seven patient fatalities.
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The identified malfunction is significant: affected sensors may display inaccurately low glucose readings. This poses a direct danger, as patients might consequently skip essential insulin doses or consume unnecessary carbohydrates, leading to severe health complications. This safety crisis presents a jarring contrast to the platform’s commercial performance, which, according to analysts at MBSB Research, recently saw quarterly sales growth of 12 percent.
Strategic Moves Aim to Broaden Foundation
Amidst this volatility, Abbott’s management is pursuing long-term strategic goals. A positive development is the recent clearance from German antitrust authorities for the planned acquisition of Exact Sciences. This deal is designed to bolster the company’s diagnostics division in the post-pandemic era and reduce reliance on any single product category.
The current share price reflects the prevailing investor caution. Having declined roughly 24 percent over a 12-month period and trading notably below its 200-day average of approximately €110, the market has already priced in a portion of the risk. The critical factor for establishing a sustainable recovery will be Abbott’s ability to resolve the FDA’s safety concerns swiftly and transparently, without permanently eroding patient trust in the FreeStyle Libre brand.
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