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AbbVie (ABBV) Gains But Lags Market: What You Should Know

Zacks Equity Research
Kroger (KR) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

AbbVie (ABBV) closed the most recent trading day at $78.08, moving +0.64% from the previous trading session. This change lagged the S&P 500's 1.47% gain on the day. Elsewhere, the Dow gained 0.79%, while the tech-heavy Nasdaq added 2.02%.

Prior to today's trading, shares of the drugmaker had lost 2.01% over the past month. This has lagged the Medical sector's gain of 1.05% and the S&P 500's gain of 1.5% in that time.

Investors will be hoping for strength from ABBV as it approaches its next earnings release. The company is expected to report EPS of $2.05, up 9.63% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.75 billion, down 2.35% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.68 per share and revenue of $32.79 billion, which would represent changes of +9.73% and +0.12%, respectively, from the prior 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% lower. ABBV is currently a Zacks Rank #3 (Hold).

Digging into valuation, ABBV currently has a Forward P/E ratio of 8.94. This valuation marks a discount compared to its industry's average Forward P/E of 15.26.

We can also see that ABBV currently has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.08 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 144, putting it in the bottom 44% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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