Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 30 Jan, 25 | ABBV | Buy | USD 175.26 | USD 191.03 | USD 205.05 | 3 days | 17.0% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
AbbVie Inc. discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers Humira, an injection for autoimmune and intestinal Behçet's diseases, and pyoderma gangrenosum; Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease; Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn's disease; Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma; Elahere to treat cancer; and Venclexta/Venclyxto to treat blood cancers. It also provides facial injectables, plastics and regenerative medicine, body contouring, and skincare products; botox therapeutic; Vraylar for depressive disorder; Duopa and Duodopa to treat advanced Parkinson's disease; Ubrelvy for the acute treatment of migraine in adults; and Qulipta for episodic and chronic migraine. In addition, the company offers Ozurdex for eye diseases; Lumigan/Ganfort and Alphagan/Combigan for the reduction of elevated intraocular pressure in patients with open angle glaucoma or ocular hypertension; Restasis to increase tear production; and other eye care products. Further, it provides Mavyret/Maviret to treat chronic hepatitis C virus genotype 1-6 infection; Creon, a pancreatic enzyme therapy; Lupron to treat advanced prostate cancer, endometriosis and central precocious puberty, and patients with anemia caused by uterine fibroids; Linzess/Constella to treat irritable bowel syndrome with constipation and chronic idiopathic constipation; and Synthroid for hypothyroidism. It has collaborations with Calico Life Sciences LLC; REGENXBIO Inc.; Janssen Biotech, Inc.; Evolveimmune Therapeutics, Inc.; Genentech, Inc.; and Tentarix Biotherapeutics, LP. The company was incorporated in 2012 and is headquartered in North Chicago, Illinois.
Strong Growth in Skyrizi and Rinvoq Sales: AbbVie’s newer immunology products, Skyrizi and Rinvoq, performed exceptionally well. Skyrizi saw an increase of 50.8 percent in global net revenues, reaching $3.205 billion, while Rinvoq’s net revenues grew by 45.3 percent, totaling $1.614 billion.
Solid Performance in Neuroscience Portfolio: AbbVie’s neuroscience portfolio saw a robust increase of 15.6 percent in global net revenues, totaling $2.363 billion. Products like Botox Therapeutic and Vraylar contributed significantly to this growth, with Botox Therapeutic revenues rising by 13.4 percent and Vraylar by 16.6 percent.
Decline in Humira Revenues: Humira, AbbVie’s flagship immunology product, experienced a significant decline in sales, with global net revenues falling by 37.2 percent on a reported basis and 36.5 percent on an operational basis. This reduction is particularly notable in the U.S., where sales dropped by 41.6 percent.
Imbruvica Revenue Decline: Imbruvica, a key oncology drug, saw a decrease in sales of 8.8 percent, with U.S. net revenues dropping to $618 million. This decline reflects weaker performance in a competitive oncology market.
Key investment risks for AbbVie include the declining revenue from Humira as it faces biosimilar competition, the potential for regulatory setbacks with its drug pipeline, and the impact of integration challenges from recent acquisitions like Cerevel and Aliada.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 175.26 | 152.48 | 191.03 | 205.05 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
AbbVie Announces Third-Quarter Financial Results for 2024
AbbVie reported third-quarter financial results for the period ending September 30, 2024, highlighting a solid performance with global net revenues reaching $14.460 billion. This reflects a 3.8 percent increase on a reported basis and a 4.9 percent increase on an operational basis. The company's earnings per share (EPS) for the quarter were $0.88 on a GAAP basis, marking a 12.0 percent decrease. However, adjusted diluted EPS, excluding specified items, was $3.00, an increase of 1.7 percent. The results include an unfavorable impact of $0.04 per share related to acquired in-process research and development (IPR&D) and milestones expense.
Immunology Portfolio Performance
AbbVie’s immunology portfolio generated $7.046 billion in global net revenues for the third quarter, reflecting an increase of 3.9 percent on a reported basis and 4.8 percent on an operational basis. Humira, one of the company's key immunology products, reported net revenues of $2.227 billion, down 37.2 percent year-over-year. U.S. Humira sales were significantly impacted, declining by 41.6 percent to $1.765 billion. In contrast, Skyrizi and Rinvoq, two newer immunology treatments, both showed strong growth, with Skyrizi net revenues increasing by 50.8 percent and Rinvoq by 45.3 percent on a reported basis.
Oncology Portfolio Highlights
AbbVie’s oncology portfolio posted net revenues of $1.687 billion, reflecting an 11.6 percent increase on a reported basis and 13.0 percent on an operational basis. Imbruvica, a key oncology drug, generated net revenues of $828 million, experiencing an 8.8 percent decline, primarily driven by a decrease in U.S. sales. Conversely, Venclexta, another oncology product, saw a 14.8 percent increase in global net revenues, reaching $677 million. AbbVie also recorded $139 million in sales from Elahere, its latest treatment for ovarian cancer.
Neuroscience Portfolio Growth
AbbVie’s neuroscience portfolio performed strongly in the third quarter, with global net revenues reaching $2.363 billion, an increase of 15.6 percent on a reported basis and 16.0 percent on an operational basis. Botox Therapeutic, a major product in the neuroscience segment, saw net revenues rise by 13.4 percent to $848 million, while Vraylar net revenues increased by 16.6 percent, reaching $875 million. Additionally, AbbVie’s oral migraine treatments, Ubrelvy and Qulipta, also performed well, generating $445 million in combined sales.
Aesthetics Portfolio Performance
AbbVie’s aesthetics portfolio, which includes Botox Cosmetic and Juvederm, experienced a modest decline in third-quarter net revenues. Overall, global revenues in this segment were $1.239 billion, a slight decrease of 0.1 percent on a reported basis but a 1.8 percent increase on an operational basis. Botox Cosmetic net revenues reached $671 million, marking an 8.2 percent increase on a reported basis, while Juvederm sales dropped by 19.7 percent to $258 million, reflecting a decrease in demand for certain indications.
Recent Strategic Developments and Full-Year Guidance
AbbVie has made significant strides in its strategic acquisitions and pipeline advancements. The company successfully completed its acquisition of Cerevel, bolstering its neuroscience portfolio with promising treatments for Parkinson’s disease, schizophrenia, and depression. AbbVie also raised its full-year adjusted EPS guidance for 2024 from a range of $10.67-$10.87 to $10.90-$10.94. The updated guidance accounts for an unfavorable impact of $0.64 per share due to acquired IPR&D and milestone expenses. Additionally, AbbVie declared a 5.8 percent increase in its quarterly dividend, from $1.55 per share to $1.64 per share, effective February 2025.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on AbbVie Inc (NYSE: ABBV) at the closing price of USD 175.26, as on January 29, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Drug Manufacturers - General
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| ABBV AbbVie Inc |
-0.615 0.29% | 208.91 | 61.52 | 14.86 | 5.62 | 51.62 | 6.76 | 20.58 |
| LLY Eli Lilly and Company |
-11.22 1.36% | 814.69 | 78.14 | 31.95 | 16.34 | 45.83 | 16.65 | 54.36 |
| JNJ Johnson & Johnson |
-9.315 5.62% | 156.53 | 29.17 | 14.33 | 3.74 | 5.18 | 3.80 | 15.22 |
| MRK Merck & Company Inc |
-2.035 2.27% | 87.72 | 59.83 | 12.33 | 4.50 | 6.47 | 4.94 | 23.79 |
| AZN AstraZeneca PLC ADR |
-0.4456 0.61% | 73.05 | 38.69 | 16.31 | 4.67 | 5.46 | 5.20 | 17.74 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 29, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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