NEW YORK (TheStreet) -- Abbott Laboratories (ABT) - Get Report shares are taking a dip, down 3.93% to $38.83 on Friday as Needham slashed its rating to "hold" from "buy," citing risks to the $25 billion acquisition of St. Jude Medical (STJ).
Analysts are overall bearish about the deal that was announced yesterday morning, even though Abbott is paying a fair price.
"Based on other recent large M&A transactions in the med tech space, we worry that Abbott shares could fall further and drag St. Jude shares down as well given the stock component of the transaction," analysts said.
In contrast to these concerns, Gabelli views the deal favorably as it makes "strategic sense and will drive shareholder value over the next three to four years," keeping its "buy" rating on the stock.
Also weighing on Abbott stock today was diagnostic test maker Alere (ALR) noting that its board of directors rejected Abbott's attempt to terminate the $5.8 billion pending acquisition of Alere.
In response, Alere said it remains confident that "there is no basis for the termination of the merger agreement," and anticipates the merger to be completed according to its terms, Reuters reports.
Separately, TheStreet Ratings currently has a "Buy" rating on the stock with a letter grade of B-.
This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its expanding profit margins over time. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
You can view the full analysis from the report here: ABT