Free Trial

Can AbbVie Grow Revenue When Humira Biosimilars Hit The Market?

Can AbbVie Grow Revenue When Humira Biosimilars Hit The Market?

Key Points

  • Shares of mega-cap pharmaceutical AbbVie have been in rally mode since the company reported its third quarter in late October. 
  • Next year, biosimilars for its top seller, Humira, will be available in the U.S.
  • For the full year, Wall Street expects AbbVie to earn $13.86 per share, which would be an increase of 14% over 2021...
  • 5 stocks we like better than AbbVie

Shares of mega-cap pharmaceutical AbbVie NYSE: ABBV added to their recent uptrend Tuesday, closing at $153.04, up $1.30, or 0.86%. Shares have been in rally mode since the company reported its third quarter in late October

The company specializes in medications for virology, immunology, oncology and other applications and conditions. Its biggest seller is Humira, which can treat a number of conditions, including arthritis, plaque psoriasis, ulcerative colitis and Crohn's disease.

In the quarter, the company earned $3.66 per share on revenue of $14.8 billion. MarketBeat earnings data for AbbVie show the company beat on the bottom line, but missed on the top line. 

For the full year, Wall Street expects AbbVie to earn $13.86 per share, which would be an increase of 14% over 2021. Next year, earnings are expected to drop by 16% to $11.71 per share.

So why the expected decline? A couple of things are going on. For starters, revenue has been decelerating since late 2020. In late July, the company said sales of leukemia treatment Imbruvica were dropping. 

Another thing, it’s widely known that the company will face biosimilar competition for brand-name Humira. Exclusivity on the patent expires next year. 

According to analyst data compiled by MarketBeat, no fewer than 10 analysts downgraded AbbVie or lowered their price targets on the stock since May of this year. The consensus rating is “hold,” with a price target of $156.61, which represents an upside of just 2.33% over where shares closed Tuesday. 

That’s a price target for the next 12 to 18 months. Clearly, it would be unusual for a stock to take that long to rise 2.33%, although it could certainly rally and then pull back.

Forming Base Since April 

AbbVie’s chart shows a consolidation that began in April, roughly at the same time a rally attempt in the S&P 500 failed. So far, AbbVie has consolidated 24%. When this current consolidation began, the stock had already rallied 48% since a breakout in early December. That prior run-up is what helps give the stock a year-to-date return of 16.51%, despite the seven-month consolidation. 


In October AbbVie said the FDA had given the OK for Rinvoq, an oral therapy to treat a chronic inflammatory condition that was not previously covered. In April, regulators approved Rinvoq for a different condition. The additional approval for Rinvoq may boost AbbVie revenue.

Another drug, Skyrizi, which treats adults with plaque psoriasis, also has the potential to drive revenue. 

With that giant market cap, you’d be correct in guessing that AbbVie is a component of the S&P 500. Because the healthcare sector is home to so many large companies, AbbVie is only the fifth largest stock in the sector.

The five most heavily weighted healthcare names, and their proportions of the index are:

The sector as a whole, as tracked by the Health Care Select Sector SPDR ETF NYSEARCA: XLV, is up +7.41% in the past month. 

Industry Leader Merck

Fellow sector component Merck & Co. NYSE: MRK is the best performer within the pharmaceutical sub-industry, which is also home to AbbVie. Merck is up 33.64% year-to-date, helped by a breakout that occurred just before the company’s late October earnings report. 

Since then, Merck shares have been essentially trading in a sideways pattern. The stock closed Tuesday at $99.60, down 4% from its November 9 all-time high of $103.75, and 7.7% above its 50-day average. 

While Merck is extended from its breakout, AbbVie’s current consolidation may show more potential, although would-be investors may have to be patient while they wait for a proper buy point to present itself. 

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 "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

The 10 Best AI Stocks to Own in 2024 Cover

Wondering where to start (or end) with AI stocks? These 10 simple stocks can help investors build long-term wealth as artificial intelligence continues to grow into the future.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
AbbVie (ABBV)
4.7183 of 5 stars
$154.79-0.4%4.01%45.93Moderate Buy$176.14
UnitedHealth Group (UNH)
4.9284 of 5 stars
$484.72-3.8%1.55%29.63Moderate Buy$570.05
Eli Lilly and Company (LLY)
4.6822 of 5 stars
$811.53+0.5%0.64%119.52Moderate Buy$769.53
Pfizer (PFE)
4.8198 of 5 stars
$27.82-1.7%6.04%-463.59Hold$35.86
Johnson & Johnson (JNJ)
4.8366 of 5 stars
$144.44+0.0%3.43%9.00Hold$175.86
Health Care Select Sector SPDR Fund (XLV)N/A$141.56-0.8%1.41%23.82N/AN/A
Merck & Co., Inc. (MRK)
4.2985 of 5 stars
$125.90-0.2%2.45%139.89Moderate Buy$131.33
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


Featured Articles and Offers

Search Headlines: