S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10

AbbVie Forms Flat Base Ahead Of Q3 Earnings Report

Wednesday, October 13, 2021 | Kate Stalter
AbbVie Forms Flat Base Ahead Of Q3 Earnings Report After shares of pharmaceutical company AbbVie (NYSE: ABBV) plummeted at the somewhat scary rate of 6.66% the week ended September 3, analysts began focusing on what caused the decline. 

Since then, the stock hasn't managed to regain much-lost ground, but it's forming a flat base ahead of its third-quarter report on October 29. 

Illinois-based AbbVie began trading as its own entity in 2013 after being split off from Abbott Laboratories. Abbott retained the medical products business, while AbbVie develops pharmaceutical products to treat conditions in the areas of immunology, oncology and virology, among others.

AbbVie continues to notch great earnings and analysts have fairly strong forecasts, so what happened to the stock in September? For the month, it was down 10.69%.

The skid centered around AbbVie's rheumatoid arthritis treatment Rinvoq. In early September, the FDA revised the warning language on Rinvoq packaging to include information about greater risks of serious and potentially fatal heart ailments, cancer and blood clots. The FDA is also restricting Rinvoq's use to patients who didn't find relief from a Tumor Necrosis Factor (TNF) Inhibitors, which control inflammation in the joints, skin and gastrointestinal tract.

Possible Revenue Decrease

Here's where a potential revenue problem occurs: If Rinvoq is used only after other treatments fail, it could mean a revenue decrease between $1 billion and $3 billion, according to a note by Geoffrey Porges at healthcare investment bank SVB Leerink.

Porges also lowered his price target from $148.00 to $142.00, according to MarketBeat's compilation of analyst actions.

Nonetheless, analysts still have a "buy" rating on the stock, with a consensus price target of $126.16, representing a 16.20% upside.

For the third quarter, analysts expect earnings per share of $3.23 on revenue of $14.43 billion. Those would be year-over-year increases on the top- and bottom lines.

For the full year, Wall Street pegged earnings at $12.61 per share, up 19%. For 2022, analysts expect earnings of $13.86 per share, a gain of another 10%. Both those numbers were revised lower recently.

If there is a dent in sales of Rinvoq, that could disrupt plans for growing a portfolio of top sellers outside its blockbuster drug Humira, whose patent expires in 2034. Early entry in 2023 is open to biosimilar manufacturers that AbbVie has struck settlements with.

Pre-pandemic, Humira, which treats Crohn's disease, was the best-selling pharmaceutical product of all time.

Picking Up Slack From Humira

So investors were reacting to the potential for lost revenue and lower earnings if Rinvoq can't pick up some of the slack from a Humira patent expiration.

AbbVie has a market capitalization of $191.76 billion. It joined the S&P 500 immediately upon being spun off from Abbott in 2013.

Prior to September's pullback, AbbVie had been making slow but steady progress this year when it comes to price appreciation. In fact, the stock is still up 6.62% year-to-date and 31.61% on a one-year basis.

Although future revenue and earnings growth are in question, revenue grew at double-digit rates in the past seven quarters, and earnings in seven of the pas eight quarters. AbbVie has been profitable since going public in 2013.

So what does this mean for AbbVie as a stock to buy? Despite the big pullback and the continued consolidation, there are still many positive aspects. The company released new data about Rinvoq last week, with the aim of boosting the drug's prospects.

A catalyst for another move either up or down may be the October 29 earnings report. At this juncture, with the stock still in a correction and earnings just a few weeks away, it's not worth trying to "buy the dip." While the sudden pullback shook out investors and looks steep on a chart, the stock has only corrected 13% from peak to trough so far.

While there's far too much potential for further surprises, in the long term, AbbVie still appears to have winning characteristics. This is a case where it's best to wait it out for now.
AbbVie Forms Flat Base Ahead Of Q3Earnings Report

Should you invest $1,000 in AbbVie right now?

Before you consider AbbVie, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and AbbVie wasn't on the list.

While AbbVie currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
AbbVie (ABBV)3.6$109.14+0.3%4.76%29.42Buy$126.67
Compare These Stocks  Add These Stocks to My Watchlist 


Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.