AbbVie ABBV
What does AbbVie do?
AbbVie is a research-driven biopharmaceutical company from the US that develops, manufactures and markets medicines worldwide. Its focus is on therapies for autoimmune and inflammatory diseases, such as Skyrizi and Rinvoq. It also has oncology drugs, including Imbruvica, Venclexta, Elahere, Epkinly and Emrelis, which are used mainly for blood cancers and solid tumors.
Another pillar is the aesthetics business, with products such as Botox Cosmetic and the Juvederm line for facial injections, skin care and body contouring. Customers are physicians, clinics, pharmacies and wholesalers; revenue depends heavily on reimbursement from health insurers and government programs. AbbVie competes with other large pharmaceutical companies but holds a strong market position in immunology. Through acquisitions and its own research, the company seeks to broaden its portfolio and replace products losing patent protection.
Score profile
Rank vs. Drug Manufacturers - General (15 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, AbbVie ranks in the middle in the group Drug Manufacturers - General (4.7/10). On growth, the company ranks among the best in the group Drug Manufacturers - General (8.3/10). On valuation (higher = cheaper), the stock ranks below average in the group Drug Manufacturers - General (3.8/10). On financial strength, AbbVie ranks in the middle in the group Drug Manufacturers - General (4.8/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 18.1x | 16.4x | better than 30 % |
| Trailing P/E | 50.5x | 32.3x | better than 19 % |
| PEG ratio | 0.6x | 3.3x | better than 96 % |
| EV/EBITDA | 18.5x | 13.4x | better than 17 % |
| Price/sales | 7.9x | 4.4x | better than 10 % |
| Revenue growth | 10.3% | 5.6% | better than 83 % |
| Gross margin | 73.7% | 74.2% | better than 43 % |
| Operating margin | 39.6% | 34.3% | better than 77 % |
| Net margin | 15.7% | 15.7% | better than 50 % |
| Return on equity | 0.0% | 20.0% | better than 17 % |
| Debt/equity | 0.0% | 119.9% | better than 97 % |
| Current ratio | 0.9x | 1.4x | better than 10 % |
| Free cash flow yield | 3.4% | 4.4% | better than 37 % |
| Dividend yield | 2.4% | 2.2% | – |
| Payout ratio | 117.4% | 60.8% | – |
| Beta | 0.19 | 0.37 | – |
Valuation: what is AbbVie worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give AbbVie a model range of 201.83 USD to 398.18 USD per share.
26 analysts, average rating “Buy”, average price target 310.65 USD (+5.7%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- The success of its immunology drugs largely determines revenue and earnings, as they account for the largest part of the business.
- A full development pipeline and successful approvals of new active ingredients support long-term growth beyond the established products.
- Demand for aesthetic treatments depends on consumer sentiment and competition, and complements the prescription drug business.
Risks
- Patent expirations and the market entry of generics or biosimilars can significantly reduce sales of established core products.
- Pricing pressure from government regulation, negotiations with payers and healthcare reforms weighs on margins in the important US market.
- Clinical setbacks, approval delays and litigation can impair the value of development projects and lead to high costs.
What to look for with AbbVie
Revenue concentration in the most important individual products is informative because it shows how dependent the company is on a few patents and their expiration risk.