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What's in the Cards for AbbVie (ABBV) This Earnings Season?

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AbbVie, Inc. ABBV will report first-quarter 2021 results on Apr 30, before market open. In the last reported quarter, the company delivered an earnings surprise of 2.46%.

The large drugmaker’s performance has been pretty impressive, with earnings beat in each of the trailing four quarters. The company has a four-quarter earnings surprise of 4.11%, on average.

AbbVie’s stock has gained 2.7% so far this year compared with an increase of 4.1% for the industry.

Factors to Consider

Sales of the company’s key drugs remained on growth trajectory on the back of robust demand for its products amid the COVID-19 pandemic in 2020. However, the company expects moderate impact of the pandemic on its business during the soon-to-be-reported quarter. The extent of the impact will be clear after the company reports its first-quarter results.

First-quarter earnings are expected between $2.79 and $2.83 per share. AbbVie expects adjusted revenues of approximately $12.7 billion in the first quarter, indicating year-over-year growth of nearly 50%. The Zacks Consensus Estimate for earnings and revenues stands at $2.77 per share and $12.94 billion, respectively.

In immunology, Humira’s demand in the United States remained high despite lower new patient starts in fourth quarter of 2020. U.S. sales of the drug are likely to have increased in the first quarter. However, Humira’s international sales are expected to have declined significantly due to the impact of biosimilars in Europe. The Zacks Consensus Estimate for Humira stands at $4.77 billion.

Meanwhile, sales of new immunology drugs, Skyrizi and Rinvoq, reflected strong uptake during the second half of 2020. The strong uptake is expected to have continued in the soon-to-be-reported quarter. However, we note that FDA decisions on two label expansion applications for Rinvoq have been delayed.

In oncology, AbbVie markets Imbruvica in partnership with Johnson & Johnson JNJ and Venclexta in partnership with Roche RHHBY. Sales of the drugs are likely to have been strong in the soon-to-be reported quarter. However, lower new patient starts in the chronic lymphocytic leukemia indication for both Imbruvica and Venclexta due to the COVID-19 pandemic is likely to have hurt sales. The Zacks Consensus Estimate for Imbruvica and Venclexta are $1.32 billion and $388 million, respectively.

AbbVie’s new HCV drug, Mavyret, recorded a significant decline in the past few quarters due to lower patient volumes amid the COVID-19 pandemic as well as rising competition. We expect the downtrend to have continued in the first quarter. The Zacks Consensus Estimate for Mavyret stands at $445 million.

AbbVie’s aesthetics products — Botox cosmetic and Juverderm — experienced a faster-than-expected recovery from the COVID-19 pandemic in the second half of 2020, reflecting significant pent-up demand. Moreover, sales of the neuroscience franchise also showed strong growth in the fourth quarter of 2020. The trend is expected to have continued for both franchises in the soon-to-be reported quarter. The Zacks Consensus Estimate for aesthetics and neuroscience products stands at $999 million and $1.3 billion, respectively.

Adjusted operating margin is expected to be approximately 50% of sales in the first quarter.

Meanwhile, investor focus will likely be on any update related to financial guidance for 2021 with the changing COVID-19 landscape as well as the company’s view on label expansion of Rinvoq on the fourth-quarter conference call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AbbVie this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate of $2.75 per share and the Zacks Consensus Estimate of $2.77, is -0.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AbbVie has a Zacks Rank #3.

AbbVie Inc. Price and EPS Surprise

AbbVie Inc. Price and EPS Surprise
AbbVie Inc. Price and EPS Surprise

AbbVie Inc. price-eps-surprise | AbbVie Inc. Quote

Stock to Consider

Here is a large drug stock that has the right combination of elements to beat on earnings this time around:

AstraZeneca AZN has an Earnings ESP of +5.26% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Johnson & Johnson (JNJ) : Free Stock Analysis Report

AstraZeneca PLC (AZN) : Free Stock Analysis Report

Roche Holding AG (RHHBY) : Free Stock Analysis Report

AbbVie Inc. (ABBV) : Free Stock Analysis Report

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