AbbVie Braces for Q4 Earnings Amid Mixed Stock Performance
North Chicago, Illinois-based AbbVie Inc. (ABBV) is a major player in the biopharmaceutical industry. The company works to develop medicines and health solutions across various fields, including immunology, oncology, neuroscience, eye care, and aesthetics. With a market cap of $310.2 billion, AbbVie ranks among the world’s largest biopharmaceutical firms.
Anticipated Fourth-Quarter Earnings
The company is set to release its fourth-quarter results before markets open on Friday, January 31. Analysts predict AbbVie will report a non-GAAP profit of $2.10 per share, which represents a decline of 24.7% from $2.79 per share reported in the same quarter last year. Notably, AbbVie has a solid track record of exceeding Wall Street’s earnings estimates, having done so in each of the last four quarters. Its adjusted EPS for the most recent quarter grew by 1.7% year-over-year to $3.00, surpassing analyst expectations by 2.7%.
Full Fiscal Year Projections
For the entire fiscal year 2024, AbbVie is projected to report an adjusted EPS of $10.06, down 9.5% from $11.11 in fiscal 2023. However, earnings are expected to bounce back in fiscal 2025 with a significant increase of 21.6%, reaching $12.23 per share.
Stock Performance Analysis
Over the past year, ABBV stock has increased by 5.5%. This performance is better than the marginal gains of the Healthcare Select Sector SPDR Fund (XLV) but lags behind the S&P 500 Index’s impressive rise of 24.4% during the same period.
Market Reactions and Future Outlook
After announcing better-than-expected Q3 results on October 30, AbbVie shares jumped 6.4%. The company reported a 3.8% increase in net revenues year-over-year, reaching $14.5 billion, largely driven by advancements in its immunology, oncology, and neuroscience divisions. A remarkable 35.1% drop in costs of goods sold (COGS) helped operating profits soar nearly 68% year-over-year to $3.8 billion, prompting AbbVie to raise its earnings guidance and boost investor confidence.
However, on November 11, ABBV stock experienced a significant drop of 12.6% following the disappointing results of two mid-stage studies for emraclidine, an experimental schizophrenia treatment AbbVie acquired for $8.7 billion. This setback wiped out approximately $40 billion from AbbVie’s market capitalization.
Analysts Remain Optimistic
Despite recent fluctuations, analysts remain positive about AbbVie’s long-term prospects. The consensus rating for ABBV is “Moderate Buy.” From a total of 27 analysts, 17 recommend a “Strong Buy,” two suggest a “Moderate Buy,” while eight advocate for a “Hold.” The average price target of $205.41 indicates a potential upside of 19.9% from current pricing levels.
On the date of publication, Aditya Sarawgi did not hold any positions in any of the securities mentioned in this article. All information and data presented are for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of Nasdaq, Inc.
