AbbVie Earnings: Solid Long-Term Outlook

Key Morningstar Metrics for AbbVie

• Fair Value Estimate: $184.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of AbbVie’s Earnings

AbbVie’s ABBV 2024 revenue grew 4.6% on a constant currency basis, with 2025 guidance of 5.7% growth and new 2027 guidance for combined sales of immunology drug Skyrizi and Rinvoq of $31 billion (up from prior guidance of $27 billion).

Why it matters: AbbVie’s longstanding immunology blockbuster Humira is seeing rapid sales erosion from biosimilar and branded competition in the United States, and while this forced the firm’s top line to shrink in 2023, it appears to have righted the ship in 2024.

• We’re particularly encouraged by 2024 growth for Skyrizi (51%) and Rinvoq (50%), with $17.7 billion in combined sales now expected to rise to $31 billion in 2027, reflecting the potential for a more than 20% compound annual growth rate for these drugs.

The bottom line: We’re raising our fair value estimate to $184 per share from $176 following these solid results and long-term guidance. We think AbbVie’s strong transition to more effective immunology products in the face of Humira’s sales erosion demonstrates its wide economic moat.

• We think shares look fairly valued, as we balance the excellent outlook for Skyrizi and Rinvoq with more tempered growth prospects in aesthetics, pressure on the oncology drug Imbruvica, the recent failure of neuroscience drug emraclidine, and a relatively early-stage pipeline.

Long view: We’re accounting for AbbVie’s early-stage immunology pipeline in our valuation, but any progress with potential next-generation therapies beyond Skyrizi and Rinvoq or novel coformulations could significantly boost our growth outlook.

• We incorporate roughly 5% average annual top-line growth into our model through 2029, which is below AbbVie’s high-single-digit growth guidance.
• We’re watching for midstage ulcerative colitis data this year (from NLRX1 small molecule ABBV-113 and next year from IL-1alpha/1beta antibody lutikizumab), among other programs, to assess any long-term forecast changes.