On Thursday, Truist Securities adjusted its outlook on AbbVie (NYSE:ABBV), a biopharmaceutical company, by increasing the stock's price target to $215 from the previous $210, while sustaining a Buy rating on the shares. The revision was attributed to an update in the company's financial model, particularly regarding the In-Process Research and Development (IPR&D) expenses as reported by AbbVie.
The company's financial model was updated to include projections for tavapadon, a treatment under development that is anticipated to achieve peak sales of approximately $1 billion. This inclusion has led to revised revenue estimates for the upcoming years. The new revenue forecasts for AbbVie are set at $55.6 billion for 2024, $59.5 billion for 2025, and $63.7 billion for 2026, which remain unchanged from the previous projections.
Additionally, the adjusted financial model reflects a slight change in the expected earnings per share (EPS) for the company. The EPS is now projected to be $10.94 for 2024, which is a slight increase from the earlier estimate of $10.87. The estimates for 2025 and 2026 remain the same at $12.33 and $14.04, respectively.
The analyst's comments provided insight into the rationale behind the updated price target and financial projections. They noted, "AbbVie Model Update, PT goes to $215 from $210. We updated our ABBV model for IPR&D expense as reported by the Company. From our due diligence on tavapadon, we now incorporate it into our model and see peak sales of ~$1B."
This update to the financial model and the subsequent price target adjustment reflect Truist Securities' continued confidence in AbbVie's stock performance and the company's potential growth driven by its product pipeline, including the promising prospects of tavapadon.
In other recent news, AbbVie has adjusted its 2024 aesthetics revenue forecast to $5.5 billion, a decrease from the previously projected $5.7 billion, as reported by Morgan Stanley. The company has also revised its profit expectations for the same year due to increased research and development expenses. Furthermore, AbbVie has submitted a Biologics License Application to the U.S. Food and Drug Administration for the approval of Teliso-V, a potential new treatment for a subset of lung cancer patients.
BMO Capital Markets has maintained its Outperform rating on AbbVie, highlighting promising clinical trial results for the company's Parkinson's treatment, tavapadon. Meanwhile, Morgan Stanley reaffirmed its Overweight rating on AbbVie shares, with a stable price target of $218.00. These are some of the recent developments for AbbVie.
Despite facing economic challenges in China, the company's market share for facial injectables in the United States has remained consistent. AbbVie's financial forecasts and R&D investments are closely watched by investors and analysts, and are expected to be factored into the evaluation of the company's future performance and its potential for growth within the competitive landscape of the pharmaceutical sector.
InvestingPro Insights
To complement Truist Securities' bullish outlook on AbbVie (NYSE:ABBV), recent data from InvestingPro provides additional context for investors. AbbVie's market capitalization stands at an impressive $344.0 billion, underscoring its significant presence in the biotechnology industry. The company's revenue for the last twelve months as of Q2 2024 reached $55.0 billion, aligning closely with Truist's projections for 2024.
InvestingPro Tips highlight AbbVie's strong dividend profile, noting that the company has raised its dividend for 12 consecutive years. This consistent dividend growth, coupled with a current dividend yield of 3.18%, may appeal to income-focused investors. Additionally, AbbVie's stock has shown robust performance, with a 35.85% total return over the past year and a 29.23% return year-to-date.
While Truist Securities has set a price target of $215, it's worth noting that the average analyst fair value target is $200, suggesting potential upside from the current trading price. Investors seeking more comprehensive analysis can access 13 additional InvestingPro Tips for AbbVie, providing a deeper understanding of the company's financial health and market position.
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