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On Wednesday, Citi analysts adjusted their stance on AbbVie (NYSE:ABBV), downgrading the stock from Buy to Neutral and revising the price target to $205 from $210. The modification in rating reflects a belief that the pharmaceutical company’s consistent pattern of exceeding quarterly expectations might not significantly boost its share price moving forward. The company, currently valued at $332 billion, has demonstrated solid performance with revenue of $57.37 billion and an impressive 71% gross margin. According to InvestingPro data, nine analysts have recently revised their earnings estimates upward for the upcoming period.
The analysts noted that while AbbVie’s current fundamentals are strong, there is a possibility that the positive effect of quarterly surprises on the stock could lessen. Investors are expected to increasingly focus on the company’s pipeline. Despite the loss of exclusivity (LOEs) for key drugs Skyrizi and Rinvoq not being an immediate concern due to their patent protection until after 2030, Citi pointed to two main areas of risk that influenced their decision. The company maintains a strong financial position, with InvestingPro analysis showing consistent dividend payments for 13 consecutive years and a current dividend yield of 3.49%.
Firstly, AbbVie’s late-stage pipeline is seen as comparatively lighter than its biopharmaceutical peers, with concerns that upcoming therapies may not achieve the same scale as the current immunology and inflammation (I&I) franchise. Secondly, there is a perceived higher policy risk associated with AbbVie than its peers due to potential reforms in pharmacy benefit management (PBM) and most favored nation (MFN) discounting, which could affect the company’s relative safety positioning in the market.
The analysts have scheduled a call for today at 11:30 am ET to discuss the downgrade and their outlook, with accompanying slides available for review. This move by Citi might influence market sentiment towards AbbVie as investors and stakeholders reassess the company’s future performance in light of these considerations.
In other recent news, AbbVie reported strong first-quarter 2025 earnings, surpassing Wall Street expectations with an adjusted earnings per share (EPS) of $2.46, compared to the forecasted $2.39. The company also reported revenues of $13.3 billion, exceeding forecasts by nearly $550 million. Following these results, AbbVie raised its full-year EPS guidance to a range of $12.09 to $12.29 and increased its revenue forecast for the fiscal year by approximately $700 million, now targeting around $59.7 billion. Guggenheim Securities responded by increasing their price target for AbbVie shares to $216, maintaining a Buy rating, while BMO Capital Markets reiterated an Outperform rating with a $215 target. Additionally, the U.S. Food and Drug Administration (FDA) approved AbbVie’s drug RINVOQ for the treatment of giant cell arteritis, marking it as the first oral Janus Kinase (JAK) inhibitor for this condition in the U.S. AbbVie has also announced a planned $10 billion investment in U.S. manufacturing over the next decade. The company’s strategic focus on its immunology portfolio, particularly the growth of Skyrizi and Rinvoq, contributed significantly to its revenue boost, despite a decline in Humira sales.
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