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AbbVie (ABBV) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

AbbVie (ABBV) closed at $102.80 in the latest trading session, marking a -0.88% move from the prior day. This move lagged the S&P 500's daily loss of 0.21%. Elsewhere, the Dow lost 0.67%, while the tech-heavy Nasdaq added 0.51%.

Prior to today's trading, shares of the drugmaker had gained 1.5% over the past month. This has lagged the Medical sector's gain of 4.78% and the S&P 500's gain of 4% in that time.

Wall Street will be looking for positivity from ABBV as it approaches its next earnings report date. The company is expected to report EPS of $2.86, up 29.41% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $13.76 billion, up 58.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.48 per share and revenue of $45.69 billion. These totals would mark changes of +17.23% and +37.36%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ABBV. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. ABBV is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that ABBV has a Forward P/E ratio of 9.89 right now. Its industry sports an average Forward P/E of 13.66, so we one might conclude that ABBV is trading at a discount comparatively.

Investors should also note that ABBV has a PEG ratio of 1.68 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.2 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 118, putting it in the top 47% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research