AbbVie Inc.

(New York Stock Exchange)
Back to all articles
Somewhat Bullish +45

AbbVie (ABBV) vs Bristol Myers (BMY): Which is a Better Stock to Buy?

Company update AI-generated analysis

πŸ“ˆ AbbVie generated $64.39 billion in revenue over the past twelve months, growing 10.20% in the most recent quarter driven by Skyrizi and Rinvoq.

πŸ’° AbbVie produced $16.87 billion of levered free cash flow, roughly double that of its rival Bristol Myers Squibb.

πŸ“‰ AbbVie carries $70.88 billion in debt against $6.57 billion in cash due to the acquisitions required to replace Humira.

πŸ“Š Bristol Myers trades at a forward P/E multiple of 9.36x, significantly cheaper than AbbVie's 16.39x multiple.

πŸ’Ή Bristol Myers converts 18.87% of revenue into net profit compared to AbbVie's 9.80% net margin.

πŸš€ Bristol Myers shares have risen 35.23% over twelve months, outperforming AbbVie despite being the 'laggard' in operational growth.

βš–οΈ AbbVie earns a 40.04% operating margin versus Bristol Myers's 34.42%, reflecting successful patent transition execution.

πŸ”’ Bristol Myers faces its own patent cliff ahead with Eliquis and Revlimid facing erosion, justifying the lower valuation multiple.

πŸ† AbbVie is held by 88 hedge funds with a stake value of $8.56 billion as of Q2 2026 according to Insider Monkey data.

Bullish Signals
  • AbbVie successfully replaced Humira without shrinking, achieving revenue growth of 10.20% in the most recent quarter.
  • The company generated $16.87 billion of levered free cash flow, demonstrating strong cash generation capabilities.
  • Skyrizi and Rinvoq are growing fast enough to cover the hole left by Humira, ensuring sustainable growth.
  • AbbVie maintains a wide operating margin of 40.04%, indicating high operational efficiency in its core business.
Risk Factors
  • AbbVie carries $70.88 billion in debt against only $6.57 billion in cash due to the cost of acquiring replacement drugs.
  • The company's trailing P/E multiple is distorted by acquisition charges, and it trades at a premium of 16.39x forward earnings compared to rivals.
  • AbbVie converts only 9.80% of revenue into net profit due to significant amortization and interest expenses from acquisitions.
Full Analysis
AbbVie (ABBV) has successfully transitioned from its blockbuster drug Humira without shrinking, driven by rapid growth in Skyrizi and Rinvoq. Over the past twelve months, revenue reached $64.39 billion with a 10.20% increase in the most recent quarter, significantly outpacing rival Bristol Myers Squibb (BMY) which grew at 5.70%. AbbVie maintains a robust 40.04% operating margin and generated $16.87 billion in levered free cash flow, demonstrating strong operational execution despite the high cost of acquisitions. However, the market valuation tells a different story compared to operational performance. While AbbVie is viewed as the superior business with sustainable growth from early-stage patent protection on its new drugs, Bristol Myers trades at a significant discount, offering a forward price-to-earnings multiple of 9.36 times versus 16.39 times for AbbVie. Bristol Myers also boasts a higher net margin of 18.87% compared to AbbVie's 9.80%, and a return on equity of 46.60% against AbbVie's lower returns, largely due to the interest and amortization burdens from AbbVie's acquisition strategy. The article concludes that while AbbVie is the better business with faster growth and higher operating margins, Bristol Myers represents the better-priced investment opportunity for value-oriented investors. Bristol Myers shares have outperformed AbbVie over the last twelve months, rising 35.23% compared to AbbVie's gains, as the market reprices the supposed laggard. Investors are paying a premium for AbbVie's completed transition while Bristol Myers offers higher yields and better bottom-line profitability metrics at a cheaper multiple.