AbbVie stock target cut, keeps Buy rating on growth outlook

On Friday, Guggenheim Securities adjusted its financial outlook for shares of AbbVie Inc . (NYSE:ABBV), reducing the price target to $212 from the previous $221, while still recommending a Buy rating for the company's shares.

With a substantial market capitalization of $307 billion and an overall "GOOD" financial health score according to InvestingPro, AbbVie maintains its position as a prominent player in the biotechnology industry. The move follows a detailed review of the pharmaceutical giant's prospects and performance, with current analyst targets ranging from $165 to $225.

Guggenheim's analysis anticipates a sustained growth trajectory for AbbVie, driven primarily by its drugs Skyrizi and Rinvoq. The firm expects these products to remain central to AbbVie's narrative, alongside a projected rebound in the aesthetics segment and increased productivity from the company's pipeline.

Supporting this growth outlook, AbbVie has demonstrated strong shareholder returns, maintaining dividend payments for 13 consecutive years with a recent dividend growth of 10.8%. Get deeper insights into AbbVie's financial health and growth prospects with InvestingPro, which offers exclusive access to over 30 key financial metrics and expert analysis.

For the fourth quarter of 2024, Guggenheim has forecasted revenues of $14.85 billion, slightly above the consensus estimate of $14.81 billion, and earnings per share (EPS) of $2.06, which is below the consensus of $2.98.

The firm's EPS projection for the entire year of 2024 stands at $10.03, in contrast to the consensus figure of $10.94, with sales estimates at $56.08 billion, closely aligned with the consensus of $56.03 billion.

Guggenheim's EPS estimates are informed by the impact of an 88 cent dilution per share, which not all analysts may have factored in. This dilution stems from the fourth-quarter 2024 research and development (IPR&D) and milestone expenses totaling $1.6 billion on a pre-tax basis, as disclosed by AbbVie on January 6th.

The firm's product-level estimates for the fourth quarter of 2024 have been slightly revised, with minor adjustments made to mid and long-term sales forecasts. Specifically, Guggenheim has reduced its sales expectations for Humira, while increasing projections for Skyrizi and Imbruvica.

The upcoming earnings call is anticipated to focus on the fiscal year 2025 and long-term guidance, particularly regarding Skyrizi, Rinvoq, and the aesthetics portfolio. Moreover, discussions are expected to cover volume and pricing trends for key products, clinical development plans for emraclidine, and AbbVie's business development priorities following unimpressive emraclidine data.

Looking ahead, Guggenheim highlighted several potential catalysts for AbbVie, including Phase 2 data for ABBV-552, a small molecule SV2A modulator in Alzheimer's Disease, expected early in 2025. With a strong gross profit margin of 70.3% and healthy cash flows, the company appears well-positioned to fund its research initiatives.

Other key developments include Rinvoq's Phase 3 data for Vitiligo and Alopecia Areata and Venclexta's Phase 3 data in High-Risk Myelodysplastic syndromes, both anticipated in 2025. For comprehensive analysis of AbbVie's pipeline and financial metrics, explore the detailed Pro Research Report available exclusively on InvestingPro.

In other recent news, AbbVie has had significant developments in its operations and collaborations. The biopharmaceutical company adjusted its fourth-quarter earnings guidance for 2024 due to substantial research and development costs, impacting by $0.88 per share. This adjustment brings AbbVie's full-year 2024 adjusted diluted earnings per share to a projected range of $10.02 to $10.06.

Moreover, AbbVie recorded a non-cash after-tax impairment charge of approximately $3.5 billion related to the emraclidine intangible asset due to unsuccessful trials of emraclidine, a drug under development for schizophrenia and Alzheimer's disease.

On a brighter note, AbbVie expanded its oncology collaboration with AbCellera, focusing on the discovery of T-cell engagers for cancer treatments. AbbVie will retain the rights to develop and commercialize any resulting therapeutic antibodies, with AbCellera receiving upfront and research payments, milestone payments, and tiered royalties on net sales of products from this collaboration.

In addition, AbbVie and REGENXBIO have advanced their collaborative efforts to develop a gene therapy, ABBV-RGX-314, for the treatment of two major eye diseases, with a Phase 3 clinical program planned for diabetic retinopathy and pivotal trial results for wet age-related macular degeneration anticipated in 2026.

Lastly, AbbVie recently acquired Nimble Therapeutics for $200 million and Aliada Therapeutics, enhancing its pipeline in immunology and inflammation, neuropsychiatry, oncology, and aesthetics. These developments showcase AbbVie's ongoing efforts to innovate and grow.

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