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AbbVie (ABBV) Stock Before Q2 Earnings: To Buy or Not to Buy?
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AbbVie (ABBV - Free Report) will report second-quarter earnings on Jul 25, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $14.05 billion and $2.56 per share, respectively.
Though the company’s earnings estimates have declined from $11.27 per share to $10.81 for 2024 in the past 60 days, they have increased from $12.08 to $12.13 for 2025 during the same period.
Image Source: Zacks Investment Research
Earnings Surprise History
AbbVie’s performance has been impressive, with its earnings beating estimates in each of the trailing four quarters. The company hasa trailing four-quarter earnings surprise of 2.69%, on average.
Image Source: Zacks Investment Research
Earnings Whispers
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or#3 have a goodchance of delivering an earnings beat. This is not the case here. You can uncover the best stocksto buy or sell before they’re reported with our Earnings ESP Filter.
AbbVie’s top line is being driven by sales of new immunology drugs, Skyrizi and Rinvoq. The Zacks Consensus Estimate for Skyrizi sales is pegged at $2.63 billion, while the same for Rinvoq stands at $1.35 billion.
Our model estimates for Skyrizi and Rinvoq sales are pegged at $2.55 billion and $1.33 billion, respectively.
Strong revenues of both these drugs are mainly driven by approvals in new indications. During the quarter, the FDA expanded Skyrizi’s label in ulcerative colitis (UC) indication which can boost sales further in the second quarter.
AbbVie lost patent protection for its blockbuster immunology drug Humira in the United States in January 2023 and has been facing sales erosion ever since. The drug lost exclusivity in ex-U.S. territories in 2018. The Zacks Consensus Estimate for Humira sales is pegged at $2.79 billion, while our estimate stands at around $2.81 billion.
We expect J&J (JNJ - Free Report) -partnered Imbruvica sales to decline due to competition from novel oral therapies. The Zacks Consensus Estimate and our model estimates for the J&J-partnered drug’s sales are pegged at $775 million and $759 million, respectively.
Roche (RHHBY - Free Report) -partnered Venclexta sales are likely to rise as new patient starts are expected to improve. The Zacks Consensus Estimate and our model estimates for the Roche-partnered drug’s sales are pegged at $612 million and $596 million, respectively.
Sales of the neuroscience franchise have shown strong growth in recent quarters, with sales likely to be driven by the depression drug Vraylar and the recently approved migraine drugs — Ubrelvy and Qulipta. The Zacks Consensus Estimate for neuroscience product sales is pegged at $2.18 billion, while our model estimate stands at around $2.17 billion.
In the aesthetics franchise, we expect overall sales to rise slightly as we expect a recovery in demand for Botox sales, which is a key driver of sales for AbbVie. The Zacks Consensus Estimate and our model estimate for aesthetics product sales are pegged at $1.47 billion and $1.46 billion, respectively.
Key Developments in Q2
During the quarter, management entered into multiple deals to expand its presence in the inflammatory bowel diseases (IBD) space. This includes the completion of two acquisitions, Landos Biopharma and Celsius Therapeutics, which added their respective lead pipeline candidates, NX-13 (for UC) and CEL383 (for IBD conditions), into AbbVie’s portfolio. Last month, AbbVie in-licensed exclusive global rights to develop and market FG-M701, a next-generation TL1A antibody for the treatment of IBD indications from the Chinese biotech FutureGen Biopharmaceutical.
In May, management signed a collaboration deal with privately held biotech Gilgamesh Pharmaceuticals to research and develop next-generation therapies for treating various types of psychiatric conditions, including mood and anxiety disorders.
Last month, the FDA issued a complete response letter (CRL) to AbbVie’s regulatory filing seeking approval for ABBV-951 to treat motor fluctuations in patients with advanced Parkinson's disease (PD). While the CRL highlighted some observations on inspection of one of AbbVie's third-party manufacturing facilities, it does not involve ABBV-951 or any other AbbVie drug. This is the second CRL issued for ABBV-951 by the FDA.
Year to date, Thestock has risen 11.2% compared with the industry‘s 19.2% growth. While the stock has also underperformedthe S&P 500, it has outperformed the sector.
ABBV Stock Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AbbVie appears attractive relative to the industry and is trading below its mean. Going by the price/earningsratio, the company shares currently trade at 14.92 forward earnings, lower than 19.92 for the industry but higher than the stock’s mean of 9.88.
Image Source: Zacks Investment Research
Investment Thesis
ABBV faces its share of headwinds like Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and lower demand for fillers in international markets. Its Parkinson’s candidate, ABBV-951, has hit a roadblock, having faced the FDA’s rejection twice. However, its key drugs Rinvoq, Skyrizi, Venclexta, and Vraylar, coupled with significant contributions from newer drugs Ubrelvy, Elahere, Epkinly and Qulipta, are expected to continue to drive top-line growth. AbbVie has several early/mid-stage pipeline candidates that have blockbuster potential. The company expects several regulatory submissions and key data readouts in the next twelve months.
AbbVie has been on an acquisition spree lately, which is strengthening its pipeline. Particularly, it is signing several M&A deals in the immunology space, its core area.
Recently, AbbVie underwent a major change in top management with the appointment of Robert Michael as the company’s new chief executive officer effective from Jul 1, 2024. Michael has been part of AbbVie since its formation and played a key role in establishing its financial planning organization, diversifying its business strategy, navigating the company through Humira’s loss of exclusivity, and supporting important M&A activity. He previously served as the chief operating officer of the company.
The stock has an attractive dividend yield of around 3.6%.
Conclusion
Despite its fair share of problems, AbbVie demonstrated growth potential. While the company is generating decent sales and profit growth from the sale of key drugs and new ones, it has also been actively pursuing collaboration and partnership deals across several therapeutic areas to drive long-term growth. It also has an attractive pipeline.
Investors who own this stock may stay invested as AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks set to return to robust growth next year. Buying AbbVie’s stock at its present reasonable valuation can prove prudent for long-term investors. Any major drop in the stock’s price can be an opportunity for long-term investors to buy it.
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AbbVie (ABBV) Stock Before Q2 Earnings: To Buy or Not to Buy?
AbbVie (ABBV - Free Report) will report second-quarter earnings on Jul 25, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $14.05 billion and $2.56 per share, respectively.
Though the company’s earnings estimates have declined from $11.27 per share to $10.81 for 2024 in the past 60 days, they have increased from $12.08 to $12.13 for 2025 during the same period.
Earnings Surprise History
AbbVie’s performance has been impressive, with its earnings beating estimates in each of the trailing four quarters. The company hasa trailing four-quarter earnings surprise of 2.69%, on average.
Earnings Whispers
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or#3 have a goodchance of delivering an earnings beat. This is not the case here. You can uncover the best stocksto buy or sell before they’re reported with our Earnings ESP Filter.
AbbVie has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors Shaping Upcoming Results
AbbVie’s top line is being driven by sales of new immunology drugs, Skyrizi and Rinvoq. The Zacks Consensus Estimate for Skyrizi sales is pegged at $2.63 billion, while the same for Rinvoq stands at $1.35 billion.
Our model estimates for Skyrizi and Rinvoq sales are pegged at $2.55 billion and $1.33 billion, respectively.
Strong revenues of both these drugs are mainly driven by approvals in new indications. During the quarter, the FDA expanded Skyrizi’s label in ulcerative colitis (UC) indication which can boost sales further in the second quarter.
AbbVie lost patent protection for its blockbuster immunology drug Humira in the United States in January 2023 and has been facing sales erosion ever since. The drug lost exclusivity in ex-U.S. territories in 2018. The Zacks Consensus Estimate for Humira sales is pegged at $2.79 billion, while our estimate stands at around $2.81 billion.
We expect J&J (JNJ - Free Report) -partnered Imbruvica sales to decline due to competition from novel oral therapies. The Zacks Consensus Estimate and our model estimates for the J&J-partnered drug’s sales are pegged at $775 million and $759 million, respectively.
Roche (RHHBY - Free Report) -partnered Venclexta sales are likely to rise as new patient starts are expected to improve. The Zacks Consensus Estimate and our model estimates for the Roche-partnered drug’s sales are pegged at $612 million and $596 million, respectively.
Sales of the neuroscience franchise have shown strong growth in recent quarters, with sales likely to be driven by the depression drug Vraylar and the recently approved migraine drugs — Ubrelvy and Qulipta. The Zacks Consensus Estimate for neuroscience product sales is pegged at $2.18 billion, while our model estimate stands at around $2.17 billion.
In the aesthetics franchise, we expect overall sales to rise slightly as we expect a recovery in demand for Botox sales, which is a key driver of sales for AbbVie. The Zacks Consensus Estimate and our model estimate for aesthetics product sales are pegged at $1.47 billion and $1.46 billion, respectively.
Key Developments in Q2
During the quarter, management entered into multiple deals to expand its presence in the inflammatory bowel diseases (IBD) space. This includes the completion of two acquisitions, Landos Biopharma and Celsius Therapeutics, which added their respective lead pipeline candidates, NX-13 (for UC) and CEL383 (for IBD conditions), into AbbVie’s portfolio. Last month, AbbVie in-licensed exclusive global rights to develop and market FG-M701, a next-generation TL1A antibody for the treatment of IBD indications from the Chinese biotech FutureGen Biopharmaceutical.
In May, management signed a collaboration deal with privately held biotech Gilgamesh Pharmaceuticals to research and develop next-generation therapies for treating various types of psychiatric conditions, including mood and anxiety disorders.
Last month, the FDA issued a complete response letter (CRL) to AbbVie’s regulatory filing seeking approval for ABBV-951 to treat motor fluctuations in patients with advanced Parkinson's disease (PD). While the CRL highlighted some observations on inspection of one of AbbVie's third-party manufacturing facilities, it does not involve ABBV-951 or any other AbbVie drug. This is the second CRL issued for ABBV-951 by the FDA.
AbbVie Inc. Price
AbbVie Inc. price | AbbVie Inc. Quote
Price Performance & Valuation
Year to date, Thestock has risen 11.2% compared with the industry‘s 19.2% growth. While the stock has also underperformedthe S&P 500, it has outperformed the sector.
ABBV Stock Performance
From a valuation standpoint, AbbVie appears attractive relative to the industry and is trading below its mean. Going by the price/earningsratio, the company shares currently trade at 14.92 forward earnings, lower than 19.92 for the industry but higher than the stock’s mean of 9.88.
Investment Thesis
ABBV faces its share of headwinds like Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and lower demand for fillers in international markets. Its Parkinson’s candidate, ABBV-951, has hit a roadblock, having faced the FDA’s rejection twice. However, its key drugs Rinvoq, Skyrizi, Venclexta, and Vraylar, coupled with significant contributions from newer drugs Ubrelvy, Elahere, Epkinly and Qulipta, are expected to continue to drive top-line growth. AbbVie has several early/mid-stage pipeline candidates that have blockbuster potential. The company expects several regulatory submissions and key data readouts in the next twelve months.
AbbVie has been on an acquisition spree lately, which is strengthening its pipeline. Particularly, it is signing several M&A deals in the immunology space, its core area.
Recently, AbbVie underwent a major change in top management with the appointment of Robert Michael as the company’s new chief executive officer effective from Jul 1, 2024. Michael has been part of AbbVie since its formation and played a key role in establishing its financial planning organization, diversifying its business strategy, navigating the company through Humira’s loss of exclusivity, and supporting important M&A activity. He previously served as the chief operating officer of the company.
The stock has an attractive dividend yield of around 3.6%.
Conclusion
Despite its fair share of problems, AbbVie demonstrated growth potential. While the company is generating decent sales and profit growth from the sale of key drugs and new ones, it has also been actively pursuing collaboration and partnership deals across several therapeutic areas to drive long-term growth. It also has an attractive pipeline.
Investors who own this stock may stay invested as AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks set to return to robust growth next year. Buying AbbVie’s stock at its present reasonable valuation can prove prudent for long-term investors. Any major drop in the stock’s price can be an opportunity for long-term investors to buy it.