The infant formula business of Abbott Laboratories (ABT:NYE) is being scrutinized by regulators. Abbott disclosed in a recent SEC filing that the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) are examining a number of its products. In January 2023, the FTC started a civil inquiry and demanded information from Abbott on a continuing probe of companies competing for the Women, Infants, and Children (WIC) program. Free nutritional supplies, including infant formula, are provided to low-income families through this program.
In December, the SEC also requested information regarding the powder infant formula business of Abbott and related public disclosures. In November 2022, the U.S. Department of Justice initiated a criminal investigation against Abbott’s Sturgis infant formula manufacturing facility.
As of the end of January, Abbott was facing about 399 lawsuits connected to its speciality formula products for premature infants. These cases allege that premature newborns contracted necrotizing enterocolitis, resulting in bodily harm or death.
Abbott disclosed six modifications to its risks in its most recent SEC filing, and according to Stock Target Adviser, the company’s legal and regulatory risks exceed the average for the sector. When purchasing Abbott stock, investors may wish to examine these concerns.
Is ABT Stock Good to Purchase?
The near-term performance of Abbott stock will continue to be harmed by its engagement in a number of legal disputes and plummeting revenues resulting from a decline in demand for COVID testing. Yet, the company’s payout history is outstanding, since it has increased dividends annually over the past decade. In addition, Abbott anticipates that its pipeline of innovative products will contribute to top-line growth.
The consensus rating for Abbott stock among analysts is Strong Buy, based on nine Buy, one Hold, and one Sell recommendations. The average price forecast of $119.18 represents a 16.1% increase from the current price. In the previous three months, shares of ABT stock have risen 3.2%.