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On Monday, Goldman Sachs updated its financial model for AbbVie (NYSE:ABBV), leading to an increase in the price target for the pharmaceutical company's shares to $208.00, up from the previous target of $205.00. The firm maintained its Buy rating on the stock. With a market capitalization of approximately $301 billion and a "GOOD" overall financial health score according to InvestingPro, AbbVie remains a prominent player in the biotechnology sector.
The revisions were made in anticipation of AbbVie's fourth-quarter 2024 earnings report, taking into account the company's expected in-process research and development (IPR&D) and milestone expenses, which are projected to be $1.6 billion on a pre-tax basis. These expenses are predicted to negatively impact both GAAP and non-GAAP diluted earnings per share by $0.88.
Goldman Sachs adjusted its fourth-quarter earnings per share (EPS) estimate for AbbVie downward to $2.06 from the prior estimate of $2.90. The full-year 2024 EPS forecast was also revised to $10.06 from $10.91, aligning with the upper end of AbbVie's updated guidance range of $10.02 to $10.06. This adjustment is noteworthy as it has not been fully reflected in consensus estimates, with the Visible Alpha consensus for the full-year 2024 EPS still at $10.54.
The firm's confidence in AbbVie remains strong, especially due to the potential growth drivers in the company's immunology portfolio, namely Skyrizi and Rinvoq. These products are expected to contribute significantly to growth as the revenue trajectory for Humira, another of AbbVie's key drugs, becomes less significant.
In summary, Goldman Sachs' updated price target and maintained Buy rating reflect a positive outlook on AbbVie's stock, bolstered by the company's growth prospects in the immunology sector.
In other recent news, AbbVie has successfully completed the acquisition of Nimble Therapeutics, a move aimed at bolstering its research and development pipeline, particularly in the field of immunology. This acquisition is expected to enhance AbbVie's immunology portfolio by incorporating Nimble's proprietary technology designed for the rapid discovery and optimization of oral peptide candidates. In addition, AbbVie has entered a partnership with Neomorph to develop a new class of drugs known as molecular glue degraders, targeting proteins involved in cancer and immune system disorders. These recent developments also include adjustments to AbbVie's full-year 2024 earnings per share projections due to significant research and development costs.
On the analyst front, Guggenheim Securities has reduced its price target for AbbVie to $212, maintaining a Buy rating. BMO Capital Markets has also maintained an Outperform rating on AbbVie shares, highlighting the potential for the company's immunology and inflammation portfolio to experience growth in 2025.
AbbVie has expanded its collaboration with AbCellera, focusing on the discovery of T-cell engagers for oncology treatments. With REGENXBIO, AbbVie is developing a gene therapy for two major eye diseases, with pivotal trial results expected in 2026. These are all recent developments indicating ongoing advancements and growth at AbbVie.
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