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AbbVie (ABBV) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

AbbVie (ABBV) closed at $83.77 in the latest trading session, marking a -0.3% move from the prior day. This move lagged the S&P 500's daily gain of 1.01%. Elsewhere, the Dow gained 0.66%, while the tech-heavy Nasdaq added 1.43%.

Heading into today, shares of the drugmaker had lost 5.08% over the past month, lagging the Medical sector's loss of 1.91% and the S&P 500's gain of 0.19% in that time.

ABBV will be looking to display strength as it nears its next earnings release, which is expected to be February 7, 2020. In that report, analysts expect ABBV to post earnings of $2.20 per share. This would mark year-over-year growth of 15.79%. Our most recent consensus estimate is calling for quarterly revenue of $8.70 billion, up 4.77% from the year-ago period.

It is also important to note the recent changes to analyst estimates for ABBV. Recent revisions tend to reflect the latest near-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.69% lower. ABBV is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, ABBV is currently trading at a Forward P/E ratio of 9. For comparison, its industry has an average Forward P/E of 15.48, which means ABBV is trading at a discount to the group.

It is also worth noting that ABBV currently has a PEG ratio of 2. 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 1.94 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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