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

Zacks Equity Research

AbbVie (ABBV) closed the most recent trading day at $94.59, moving +0.79% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.2%. Elsewhere, the Dow gained 1.7%, while the tech-heavy Nasdaq added 1.13%.

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 $2.33, up 3.1% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $10.21 billion, up 23.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.71 per share and revenue of $45.42 billion, which would represent changes of +19.8% and +36.54%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ABBV. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.99% higher. ABBV is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, ABBV currently has a Forward P/E ratio of 8.77. For comparison, its industry has an average Forward P/E of 15.24, which means ABBV is trading at a discount to the group.

Also, we should mention that ABBV has a PEG ratio of 1.99. 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 industry currently had an average PEG ratio of 2.04 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 17, putting it in the top 7% 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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