AbbVie Earnings: Maintaining Fair Value Estimate as Firm Rapidly Pushes Through Humira Headwind

Key Morningstar Metrics for AbbVie

• Fair Value Estimate: $176.00
• Morningstar Rating: 3 stars
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of AbbVie’s Earnings

AbbVie’s ABBV nearly $14.5 billion in third-quarter revenue, which grew roughly 4% year over year, was ahead of our expectations. We think the firm has made it through the steepest sales declines of its formerly foundational immunology drug Humira. Management raised its 2024 guidance to $56 billion in revenue and $10.90-$10.94 in non-GAAP earnings per share—its third increase this year. However, we’re maintaining our fair value estimate of $176 per share after making only minor changes to our model in the long run.

Newer immunology products Skyrizi and Rinvoq, which had more than $4.8 billion in combined sales in the quarter, grew faster than our expectations, helping to support the firm’s long-term growth prospects and wide moat. Skyrizi’s more recent launch in ulcerative colitis, approved by the FDA in June, appears to be going well, highlighting its potential for growth in inflammatory bowel diseases.

In oncology, which grew 12%, Imbruvica continues to decline due to competition from AstraZeneca’s AZN Calquence, although differentiated therapies like Venclexta and the newly launched Elahere (from the ImmunoGen acquisition) grew nicely. AbbVie has filed for approval of Teliso-V in a subset of lung cancer patients, which should support growth starting next year. In neurology, which grew 16%, Botox Therapeutic, Vraylar, and migraine drugs Ubrelvy and Qulipta all saw double-digit growth.