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North Chicago, Illinois-based AbbVie Inc. (ABBV) discovers, develops, manufactures, and sells pharmaceuticals worldwide. With a market cap of $311.4 billion, the company discovers and develops medicines and therapies that solve health issues across immunology, oncology, aesthetics, neuroscience, and eye care.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and ABBV definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the general drug manufacturers industry. ABBV stands out in the fields of immunology and oncology, with popular products like Humira, Skyrizi, and Rinvoq solidifying its market position. The recent approvals of Skyrizi for ulcerative colitis and Rinvoq for pediatric patients with arthritis showcase AbbVie's dedication to addressing medical needs. Through strategic acquisitions of companies like ImmunoGen and Cerevel Therapeutics, AbbVie continues to expand its oncology pipeline and enhance its therapeutic offerings.
Despite its notable strength, ABBV slipped 15% from its 52-week high of $207.32, achieved on Oct. 31. Over the past three months, ABBV stock declined 8.9%, underperforming the Dow Jones Industrials Average’s ($DOWI)10.7% gains during the same time frame.
In the longer term, shares of ABBV rose 13.7% on a YTD basis and climbed 20.4% over the past 52 weeks, underperforming DOWI’s YTD gains of 18.5% and 23.8% returns over the last year.
To confirm the bearish trend, ABBV has traded below its 50-day moving average since late October. The stock has been trading below its 200-day moving average since mid-November, with slight fluctuations.
ABBV's underperformance is linked to the patent expiration of its drug Humira, resulting in declining sales due to biosimilar competition. While erosion of Humira's sales was initially slower than expected, recent data suggests accelerated erosion from competitors like Skyrizi and Rinvoq. Additionally, declining sales of Juvederm fillers in the U.S. and China are impacting revenue, as factors like slowing market growth and economic challenges in China affect consumer spending. AbbVie faced pressure following disappointing results from a schizophrenia drug in development, impacting investor sentiment.
On Oct. 30, ABBV shares closed up more than 6% after reporting its Q3 results. Its adjusted EPS of $3 surpassed Wall Street expectations of $2.92. The company’s revenue was $14.5 billion, beating Wall Street forecasts of $14.3 billion. AbbVie raised its full-year adjusted EPS to be between $10.90 and $10.94.
In the competitive arena of general drug manufacturers, Eli Lilly and Company (LLY) has taken the lead over ABBV, showing resilience with a 41.8% uptick on a YTD basis and solid 40.3% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on ABBV’s prospects. The stock has a consensus “Moderately Buy” rating from the 26 analysts covering it, and the mean price target of $204.77 suggests a potential upside of 16.2% from current price levels.
