Are Investors Undervaluing AbbVie (ABBV) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is AbbVie (ABBV). ABBV is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.41, while its industry has an average P/E of 16.44. Over the past year, ABBV's Forward P/E has been as high as 11.61 and as low as 6.78, with a median of 8.82.
Investors should also note that ABBV holds a PEG ratio of 2.09. 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. ABBV's PEG compares to its industry's average PEG of 2.13. Within the past year, ABBV's PEG has been as high as 2.13 and as low as 0.71, with a median of 1.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ABBV has a P/S ratio of 3.98. This compares to its industry's average P/S of 4.33.
These are just a handful of the figures considered in AbbVie's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ABBV is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
