AbbVie Investors Trigger Trend-Following Signal: Time to Load Up
AbbVie (NYSE: ABBV) is a high-quality, dividend-growing pharmaceutical company with a robust outlook for growth: now is a good time to load up on shares. Fears of Humira’s patent cliff are behind it, with Skyrizi, Rinvoq, and the diversified portfolio of products gaining traction. Among the critical details from Q4 and the end of F2024 is that Humira sales are down by solid double-digits and are expected to weaken in 2025. Still, Rinvoq and Skyrizi are up 46% and 58%, respectively, more than offsetting the contraction.
Looking forward, the company has reaffirmed the outlook for a high-single-digit CAGR for at least the next four years, an outlook that puts this high-yielding diamond at under 10x earnings by 2030, a deep value opportunity too good to pass up.
AbbVie Gains Traction in a Post-Humira World
Investors worried about AbbVie’s longevity in a post-Humira world can lay their fears to rest. The Q4 results are strong, including a 5.6% top-line growth, which outpaced the consensus forecasts. Growth was seen in most segments with Neuroscience leading at 20% and Aesthetics contracting by 5.2%. Immunology, the core segment, grew nearly 5% under the influence of its new blockbusters, while Oncology, a critical growth avenue, increased by 12%.
The margins news is mixed due to an acquired IP/RD milestone cutting into the results. The company posted a GAAP loss and adjusted contraction, leaving EPS at $2.16 and a dime short of forecasts. However, the earnings and cash flow remain strong enough to sustain balance sheet health, capital returns, and a solid long-term outlook. The impact of R&D milestones is expected to impact results moving forward, with pipeline advances leading to the next round of significant releases.
Guidance is why the stock price will move higher in 2025. The initial F2025 guidance is robust, expecting $12.22 in adjusted EPS at the mid-point range. This is 18% above MarketBeat’s reported consensus at the time of release but does not include possible milestones, so it may not be directly comparable. Even so, assuming AIP/RD milestones are equal to 2024’s in 2025, the guidance is still better than consensus and a positive for investors.
Analysts Support AbbVie’s Stock Price in 2025
Analysts’ sentiment trends are strong, with coverage rising significantly in the second half of 2024, the price target rising, and a double-digit upside indicated. The number of analysts covering the stock rose 60% to 24 in H2 2024, which is significant because of the investment dollars they represent and the inflows sparked by their coverage. They rate the stock as a Moderate Buy and see it rising to $205 or higher by year’s end. Institutions provide another tailwind for the market, buying on balance every quarter since 2022 and buying value more than double the selling.
The capital return is among the reasons why sell-siders like this stock. The growth outlook, cash flow, and balance sheet support a healthy dividend worth about 60% of earnings and over 3.5% in yield, with shares trading near critical support levels.
AbbVie: The Rebound Is on, a New High Is Possible This Year
AbbVie’s market responded strongly to the news with a 5% advance in premarket trading. The move extends a rebound begun earlier in the week and confirms strong support at the $170 level, aligning with a trend-following signal. The stochastic and MACD indicators compound the signal, aligning with an oversold market within an uptrend, ready for its next bullish swing. The price of ABBV shares could quickly advance to the $200 level and set a new high in this scenario, but first, it must cross the $186.50 level and close the gap that formed late in 2024.
