The Zacks Analyst Blog Highlights GE Healthcare, Johnson & Johnson, Abbott and Boston Scientific

For Immediate Release

Chicago, IL – May 6, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: GE Healthcare GEHC, Johnson & Johnson JNJ, Abbott ABT and Boston Scientific BSX.

Here are highlights from Monday’s Analyst Blog:

MedTech Adjust 2025 Outlooks Amid Tariffs: What Investors Should Know

After two strong years, 2025 was expected to mark another high-growth chapter for the MedTech industry, particularly in health technology. Instead, recent first-quarter results show a different story. Rising tariffs and unstable capital markets have changed the game, forcing companies across the board, from startups to large corporations, to adjust their expectations.

The re-emergence of aggressive U.S. trade policies under President Donald Trump, highlighted by a 145% baseline tariff on Chinese imports and reciprocal tariffs of a minimum of 125%, has shaken the foundation of global supply chains. While pharmaceuticals remain largely untouched, medical technology companies, particularly those with manufacturing ties to China and Mexico, are navigating significant cost pressure.

Still, major MedTech players like GE Healthcare, Johnson & Johnson, Abbott and Boston Scientific are showing resilience. Their first-quarter earnings reflect strong adaptability, but even most of these major players have scaled back their full-year 2025 forecasts in response to rising tariff pressure.

On the other hand, health tech startups are struggling more. With smaller budgets and less financial flexibility, they're dealing with delays in production, higher costs and tighter access to funding. This could slow down innovation in fast-growing areas such as digital diagnostics, AI-driven devices and wearable tech sectors that had been thriving since the pandemic. Let us delve deeper.

Trade Policy Rattles 2025 Forecasts of MedTech Giants Despite Strong Start to Q1

GE Healthcare reported robust first-quarter 2025 results with revenues rising 3% year over year and net income surging 51%. Despite this, the company slashed its full-year adjusted EPS forecast from a range of $4.61–$4.75 to $3.90–$4.10. GE Healthcare management cited an 85 cents per share tariff impact, largely from U.S.-China, Mexico and Canada bilateral duties.

This Zacks Rank #4 (Sell) stock is expected to report earnings decline of 6.7% in 2025 on a 2.5% revenue increase.

Johnson & Johnson or J&J, on its first-quarter earnings call, revealed a $400 million tariff burden, primarily from exporting medical devices from the United States into China. As per the company, the cost is being phased into inventory and will impact the profit and loss statement over time.

J&J management highlighted that its $55 billion domestic investment plan was announced in March. The company is also restructuring its orthopedics and surgery divisions, which is expected to cause a temporary $250 million drop in revenues. J&J, a Zacks Rank #3 (Hold) stock, is projected to report earnings growth of 6.2% on revenue growth of 2.7% in 2025.

Abbott posted a 4% increase in first-quarter 2025 revenues and 8.2% growth in net earnings. Yet, the company is bracing for a tariff impact in the range of a few hundred million dollars. The company chose to maintain its earnings forecast, even though it considered raising it prior to the new trade measures.

As per management, with 90 global manufacturing sites and U.S. expansion underway in Illinois and Texas, Abbott is positioned to adapt. However, the company is concerned that the tariffs might have a long lifespan. Abbott, a Zacks Rank #3 stock, is expected to report earnings growth of 10.5% on revenue growth of 6.5% in 2025.

Boston Scientific's first-quarter 2025 adjusted EPS increased 33.9% year over year on revenue growth of 20.9%. The company is an exception as it raised its 2025 guidance despite anticipating a $200 million tariff hit in the second half of 2025. The company now expects organic revenue growth of 12%-14% (earlier 10-12%) and adjusted EPS of $2.87–$2.94, up from $2.80–$2.87.

Boston Scientific credits its strong performance to solid sales growth and targeted cost-cutting, including reduced spending on travel and meetings. Rather than overhauling its supply chain, the company is reinforcing recent capacity expansions in Georgia and Minnesota. This Zacks Rank #2 (Buy) stock is expected to report earnings growth of 15.9% on revenue growth of 16.4% in 2025. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Startups Struggle Under Weight of Tariffs and Funding Tightness in Q1

Health tech startups, once buoyed by pandemic-era growth, are now facing rising tariffs and cautious investors. According to the Healthcare Brew report, U.S. digital health funding rose slightly to $3 billion in the first quarter of 2025, up from $2.9 billion a year earlier. But this is still far below the $6.6 billion peak in 2021. Startups like Reperio Health, relying on global suppliers, are feeling the pressure. The company stocked up on testing kits ahead of tariff hikes but worries about scaling delays.

Still, some founders remain hopeful. Float Health said healthcare's stability may attract more investors during uncertain times. Both Float and Reperio are focused on cutting costs and improving patient access. Reperio partnered with Uber for faster kit delivery, while Float is expanding lower-cost home care services. For many startups, survival now depends on smart logistics, lean operations and steady resolve.

What's Next?

With little hope for broad tariff relief, most MedTech companies are preparing for a future where trade barriers are the norm. Groups like AdvaMed are pushing for exemptions, but executives mostly agree that tariffs are here to stay. Per market experts, to stay competitive, companies must continue to diversify supply chains, invest in U.S. manufacturing and manage costs carefully. Still, patients could feel the impact as higher costs and supply disruptions might affect drug access and pricing. The bottom line is that regardless of the company size or structure, the shift toward domestic production is no longer optional but has become an industry imperative.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]                                      

https://www.zacks.com                                                 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research