Abbott pricing in higher NEC liability than expected, says Jefferies

Jefferies keeps a Hold rating on Abbott after conducting another conversation with a U.S. attorney expert, Peter Tu, to try to better understand considerations related to the ongoing necrotizing enterocolitis litigation actions against Reckitt Benckiser’s Mead Johnson and Abbott. The expert sees settlement in 2025 as likely for amounts smaller than those discounted by the market, the analyst tells investors in a research note. The firm says the discount on the share prices of Reckitt and Abbott is likely more than the total liability that will be faced. This is dependent on a settlement with a suggested upper limit of 3,000 cases per defendant in 1.5 years, receiving an average of no more than $2M each, Jefferies points out.