AbbVie Inc.

(New York Stock Exchange)
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Somewhat Bullish +45

AbbVie (ABBV) Outgrew Humira’s Collapse. Is its Forward P/E Fair for What Comes Next?

Acquisition Drug approval Earnings report AI-generated analysis

📈 Total revenue increased 10.2% to $16.99 billion in the quarter, successfully offsetting a 35.9% decline in Humira sales.

💊 Immunology segment grew 15.1% to $8.786 billion driven by Skyrizi ($5.505B) and Rinvoq ($2.525B) sales.

🧠 Neuroscience sales surged 20.3% to $3.228 billion, indicating a second growth leg for the company.

💰 Adjusted EPS rose 22.9% to $3.65, though one-time acquired research expenses added $0.17 per share.

🤝 AbbVie closed the purchase of Apogee Therapeutics for $10.9 billion to advance its immunology pipeline.

⏳ The Apogee deal is expected to drag on adjusted EPS by $0.46 in 2027 before becoming accretive in 2032.

📉 Skyrizi and Rinvoq face patent exclusivity expiration within the next decade, posing a long-term risk.

📊 The stock trades at a forward P/E of 18.97, slightly above its five-year average but in line with sector peers.

🏦 Hedge fund ownership increased to 88 funds, while short interest remains low at just 1.23%.

⚠️ A sharp slowdown in successor drug growth or continued acquisition costs could negatively impact the stock.

Bullish Signals
  • Total revenue grew 10.2% to $16.99 billion, demonstrating successful replacement of Humira sales.
  • Immunology segment revenue increased 15.1% to $8.786 billion, driven by strong performance from Skyrizi and Rinvoq.
  • Neuroscience sales jumped 20.3% to $3.228 billion, signaling diversification beyond immunology.
  • Adjusted EPS rose 22.9% to $3.65, reflecting strong operational execution despite one-time costs.
  • Management guided full-year adjusted EPS between $13.87 and $14.07, showing confidence in future performance.
Risk Factors
  • Humira sales dropped 35.9% to $756 million, creating a significant revenue gap that successors must fill.
  • The Apogee acquisition will reduce adjusted EPS by approximately $0.46 in 2027 before becoming accretive in 2032.
  • Oncology sales slipped 1.5% to $1.650 billion, indicating weakness in that specific therapeutic area.
Full Analysis
AbbVie (NYSE: ABBV) reported strong financial performance in the latest quarter, with total revenue climbing 10.2% to $16.99 billion despite a significant 35.9% decline in its blockbuster drug Humira sales, which fell to $756 million. The company successfully offset this loss with robust growth from its successor immunology drugs, Skyrizi and Rinvoq, which collectively drove immunology segment revenue up 15.1% to $8.786 billion. Beyond immunology, AbbVie demonstrated diverse growth across other therapeutic areas, including a 20.3% increase in neuroscience sales to $3.228 billion and modest gains in oncology and aesthetics segments. Adjusted earnings per share rose 22.9% to $3.65, supported by strong operational performance, though the company incurred one-time acquired research expenses of $0.17 per share. Management provided full-year adjusted EPS guidance ranging between $13.87 and $14.07. The company recently completed its acquisition of Apogee Therapeutics for $10.9 billion to bolster its future immunology pipeline, specifically targeting the lead candidate zumilokibart. While this deal is expected to reduce adjusted EPS by approximately $0.46 in 2027 before becoming accretive in 2032, it represents a strategic long-term investment. Analysts note that while the stock trades at a forward P/E of 18.97, slightly above its five-year average, the valuation reflects investor confidence in the company's ability to sustain growth as Humira's patent exclusivity wanes. Investors are closely monitoring the sustainability of Skyrizi and Rinvoq growth rates against the looming patent cliff for these drugs within the next decade. Hedge fund ownership has increased slightly, with short interest remaining low at 1.23%, indicating continued support from institutional investors. The article concludes that AbbVie appears fairly priced for long-term investors comfortable with pipeline dependence, though a slowdown in successor drug growth or higher acquisition costs could alter this outlook.