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On Tuesday, Raymond (NSE:RYMD) James analyst Gary Nachman maintained an Outperform rating on AbbVie stock (NYSE:ABBV) with a $218.00 price target. The target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $165 to $227. Nachman provided insights following a recent discussion with the company, expressing a positive outlook on AbbVie's growth prospects through the end of the decade and into the 2030s. With a market capitalization of $312.6 billion and a strong financial health rating, AbbVie continues to demonstrate its position as a prominent player in the biotechnology industry. AbbVie shared its focus areas at a recent investor conference, emphasizing its confidence in meeting the mid-single-digit growth target for revenue in 2025, despite various challenges and opportunities.
The company highlighted the potential value of Emraclidine in the adjunctive treatment for schizophrenia and other psychiatric areas. AbbVie also conveyed optimism regarding several early-stage opportunities within its pipeline that are currently underappreciated. This focus on pipeline development comes as InvestingPro analysis reveals the company's strong dividend history, having maintained payments for 13 consecutive years with a current yield of 3.71%. For deeper insights into AbbVie's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. Nachman noted several recent partnerships aimed at bolstering AbbVie's pipeline and addressed some policy questions.
Nachman updated his model to include the IPR&D charge in the fourth quarter, as well as stronger performance from Skyrizi and Rinvoq in inflammatory bowel disease (IBD), which is expected to offset additional pressure on Humira. He provided data points on prescription and pricing trends for key products ahead of the company's quarterly results and 2025 guidance, set to be released this Friday, January 31.
The analyst pointed out that Skyrizi and Rinvoq are continuing to gain momentum in IBD, with no significant cannibalization of each other, and are benefiting from new patient switches from Humira to these newer molecules. Although the Part D redesign is anticipated to be a slight headwind in 2025, impacting revenue growth by a few points, AbbVie is expected to absorb this impact and still achieve mid-single-digit revenue growth.
Nachman also mentioned that despite a recent setback, Emraclidine still holds value as an adjunctive treatment. Additionally, Tavapadon has exceeded initial expectations, and there are several promising oncology programs, although they are still in the early stages. Further contributions to growth are expected from additional indications for Rinvoq.
In terms of policy, the inclusion of Linzess and Vraylar in the new Medicare price negotiation list was not unexpected, and no major impacts to AbbVie are foreseen from potential pharmacy benefit manager (PBM) reform, the appointment of RFK Jr., or the new Federal Trade Commission (FTC) head. Nachman concluded by reiterating the Outperform rating, stating confidence in AbbVie's overall numbers and the largely upside potential of its pipeline, which could drive multiple expansion in the future. He believes AbbVie should remain a core holding for investors. Supporting this view, InvestingPro data shows the company maintains a robust gross profit margin of 70.3% and has achieved a strong return over the last decade. Subscribers to InvestingPro can access over 10 additional key insights and detailed financial metrics to make more informed investment decisions.
In other recent news, AbbVie has been the focus of several significant developments. Piper Sandler and Goldman Sachs have increased AbbVie's stock price target to $227 and $208, respectively, while Guggenheim Securities reduced its price target to $212. All three firms maintain positive ratings on AbbVie's shares. These adjustments come in anticipation of AbbVie's fourth-quarter 2024 earnings report, with expected research and development expenses projected to impact earnings per share.
AbbVie has also completed the acquisition of Nimble Therapeutics, aimed at strengthening its research and development pipeline, particularly in the field of immunology. Additionally, 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.
AbbVie's collaborations with other companies continue to progress. With REGENXBIO, AbbVie is developing a gene therapy for two major eye diseases, with pivotal trial results expected in 2026. The company has also expanded its partnership with AbCellera, focusing on the discovery of T-cell engagers for oncology treatments. These are all recent developments indicating ongoing advancements and growth at AbbVie.
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