Navigating ABBV Stock Potential – Editor's Overview

AbbVie logged a -4.7% change during today's afternoon session, and is now trading at a price of $159.39 per share.

AbbVie returned gains of 10.7% last year, with its stock price reaching a high of $182.89 and a low of $130.96. Over the same period, the stock underperformed the S&P 500 index by -10.4%. The company's 50-day average price was $174.78. AbbVie Inc. discovers, develops, manufactures, and sells pharmaceuticals worldwide. Based in North Chicago, IL, the Large-Cap Health Care company has 50,000 full time employees. AbbVie has offered a 3.6% dividend yield over the last 12 months.

The Firm Has a Declining EPS Growth Trend:

2018 2019 2020 2021 2022 2023
Revenue (M) $32,753 $33,266 $45,804 $56,197 $58,054 $54,318
Operating Margins 19% 39% 25% 32% 31% 23%
Net Margins 17% 24% 10% 21% 20% 9%
Net Income (M) $5,687 $7,882 $4,616 $11,542 $11,836 $4,863
Net Interest Expense (M) -$1,144 -$1,509 -$2,280 -$2,384 -$2,044 -$1,684
Depreciation & Amort. (M) $471 $464 $666 $803 $778 $752
Diluted Shares (M) 1,546 1,484 1,673 1,777 1,778 1,773
Earnings Per Share $3.66 $5.28 $2.72 $6.45 $6.63 $2.72
EPS Growth n/a 44.26% -48.48% 137.13% 2.79% -58.97%
Avg. Price $77.48 $65.1 $80.3 $104.86 $142.88 $159.13
P/E Ratio 21.11 12.28 29.41 16.18 21.49 58.29
Free Cash Flow (M) $12,789 $12,772 $16,790 $21,990 $24,248 $22,062
CAPEX (M) $638 $552 $798 $787 $695 $777
EV / EBITDA 22.23 9.13 16.32 13.46 16.24 24.29
Total Debt (M) $36,611 $66,728 $86,022 $76,670 $63,270 $59,385
Net Debt / EBITDA 4.28 1.99 6.45 3.57 2.86 3.45
Current Ratio 0.98 3.18 0.84 0.79 0.96 0.87

AbbVie's Valuation Is in Line With Its Sector Averages:

AbbVie has a trailing twelve month P/E ratio of 64.0, compared to an average of 30.21 for the Health Care sector. Based on its EPS guidance of $12.15, the company has a forward P/E ratio of 14.4. AbbVie's PEG ratio is 4.85 on the basis of the 13.2% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, AbbVie is likely overvalued compared to the book value of its equity, since its P/B ratio of 27.17 is higher than the sector average of 4.08. The company's shares are currently trading 742.9% below their Graham number. Ultimately, AbbVie's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.

There's an Analyst Consensus of Some Upside Potential for AbbVie:

The 24 analysts following AbbVie have set target prices ranging from $161.0 to $207.0 per share, for an average of $184.7 with a buy rating. The company is trading -13.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.

AbbVie has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 71.8% of the company's shares, and the insider ownership rate stands at 0.11%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $25,566,435,669.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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