Morningstar

AbbVie Earnings: Higher 2025 Guidance Projects Immunology Confidence Despite Potential Tariff Hit

While management did not quantify any potential tariff exposure, it did signal that the effect would be in line with the industry impact.

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AbbVie Inc
(ABBV)

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What We Thought of AbbVie’s Earnings

AbbVie ABBV reported 8.4% revenue growth and 6.5% adjusted diluted EPS growth in the first quarter. Management raised its 2025 adjusted diluted EPS guidance by 10 cents at the midpoint to a range of $12.09-$12.29, but this does not include the Gubra licensing agreement or potential pharma tariffs.

Why it matters: Given the significant uncertainty surrounding potential regulatory timeline delays and pharmaceutical tariffs, AbbVie’s strong first-quarter performance and guidance were reassuring.

  • Skyrizi (71% growth) and Rinvoq (57%) were the strongest drivers of outperformance in the quarter, and management’s combined $900 million guidance raise for these two products more than offset the $500 million lower Humira guidance due to intense biosimilar competition and lower pricing.
  • While management did not quantify any potential tariff exposure for pharmaceuticals, it did signal that the effect would be in line with the industry impact and emphasized its US Skyrizi manufacturing and $10 billion planned investment in US manufacturing over the next 10 years.

The bottom line: We’re maintaining our $184 fair value estimate for AbbVie, and we think the firm’s broad, growing portfolio and intriguing pipeline warrant a wide moat. However, we see shares as fairly valued at recent prices, and we’re watching the early-stage pipeline for potential to raise our valuation.

  • We’re most interested in whether AbbVie can build on its Skyrizi and Rinvoq success in immunology with new combinations in the pipeline, such as programs targeting TL1A, alpha-4 beta-7, and IL-1 alpha/beta, and we expect some initial data in 2026.
  • The recent Gubra licensing deal brings rights to phase 1 amylin drug ABBV-295, which has had impressive data in obesity over a six-week time horizon at a relatively low 2 mg weekly dose. We’re carefully watching for potential 12-week data at higher doses from this study in 2026.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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