North Chicago-based Abbvie Inc. (ABBV), with a market cap of $277.3 billion, is a global pharmaceutical leader with solid exposure to immunology with drugs like Humira, Skyrizi, and Rinvoq, and oncology with Imbruvica and Venclexta. The company’s 2020 acquisition of Allergan significantly boosted its prominence in the pharma sector by adding several new products and drugs in aesthetics, including Botox.
Shares of the pharma giant have lagged behind the broader market in the last year. While ABBV has surged 11.3% over this time frame, the broader S&P 500 Index ($SPX) has rallied by 28.9%. In 2024, the stock rose 1.4%, compared to SPX’s 11.2% return on a YTD basis.
Narrowing the focus, ABBV has also underperformed the Vaneck Pharmaceutical ETF (PPH). The exchange-traded fund has gained 16.8% over the past year, outperforming ABBV’s return for the period.
ABBV's underperformance relative to the broader market over the past year could be attributed to patent expirations, fierce competition, and regulatory uncertainties, dampening investor sentiment.
However, shares of Abbvie were on an uptrend following the announcement of its partnership with Gilgamesh Pharmaceuticals to develop next-generation therapies for psychiatric disorders. Besides, Abbvie is focusing on long-term growth by making strategic investments, including the recent $10 billion acquisition of ImmunoGen earlier this year.
For the current fiscal year, ending in December, analysts expect ABBV’s EPS to rise 1.4% year over year to $11.26. Moreover, the company’s earnings surprise history is impressive. It exceeded the consensus estimate in each of the last four quarters.
Abbvie stock has a consensus “Moderate Buy” rating. Out of 23 analysts covering the stock, 12 recommend a "Strong Buy," two suggest a "Moderate Buy," and nine advise a "Hold."
The consensus rating is slightly more bullish than a month ago, with 11 analysts suggesting a “Strong Buy.”
Recently, Barclays lowered Abbvie's target price from $195 to $187, maintaining an "Overweight" rating. The new price target indicates a 19.1% potential upside from current prices.
The mean price target of $177.52 suggests a 13% premium to ABBV from current levels. The Street-high target of $200 represents an upside potential of 27.3%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
