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AbbVie Earnings: Strong Results and Robust Outlook

We plan to increase our fair value estimate for AbbVie’s stock.

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Key Morningstar Metrics for AbbVie

What We Thought of AbbVie’s Earnings

AbbVie ABBV reported strong fourth-quarter earnings and increased long-term guidance well above our expectations, and we plan to increase our fair value estimate of the firm’s stock based on its strengthening position.

AbbVie’s performance with next-generation immunology drugs Skyrizi and Rinvoq looks exceptional. The firm has successfully transitioned from the loss of exclusivity on older immunology drug Humira to these newer, more efficacious drugs. AbbVie increased its 2027 combined sales guidance for Skyrizi and Rinvoq by close to $6 billion to $27 billion. Based on the trajectory of the drugs and new indications, we believe the outlook is achievable. While Humira sales will continue to fall as biosimilar competition increases in 2024, we expect the firm’s immunology franchise to post steady gains after 2024. The successful navigation around Humira’s loss of exclusivity was a key factor in our recent moat upgrade to wide.

Outside immunology, the remaining core segments performed as expected. The oncology franchise (down 8%) continues to face competitive pressures on Imbruvica, which should continue over the next couple of years. Botox cosmetic (up 12%) is buoying the aesthetics segment, which should continue due to Botox’s strong entrenchment, despite increasing competition. Neuroscience gained 22%, supported by strong launches with migraine drugs and a major depression label expansion for Vraylar.

In the pipeline, AbbVie still needs to develop stronger phase 3 assets, but an improving phase 2 pipeline and the recently announced acquisitions of ImmunoGen and Cerevel help improve the firm’s long-term outlook. We are most bullish on the cancer drug Elahere from the ImmunoGen acquisition. Also, several Alzheimer’s drugs should have phase 2 data in late 2024 or early 2025, and positive data could set up major new blockbusters.

AbbVie Stock Price

Data as of Source: Morningstar Direct.

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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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About the Author

Damien Conover

Sector Director
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Damien Conover, CFA, is the director of healthcare equity research for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He is also director of equity strategy, responsible for helping to shape, package, and surface research based on Morningstar’s investment philosophy by working closely with the firm’s sector strategists and directors.

Before joining Morningstar in 2007, Conover was an equity research analyst covering the healthcare sector for Raymond James, Bank of Montreal, and Tucker Anthony.

Conover holds bachelor’s and master’s degrees in finance from the University of Wisconsin and was a member of its Applied Security Analysis Program. He also holds the Chartered Financial Analyst® designation.

Damien Conover, CFA, is the director of healthcare equity research for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He is also director of equity strategy, responsible for helping to shape, package, and surface research based on Morningstar’s investment philosophy by working closely with the firm’s sector strategists and directors.

Before joining Morningstar in 2007, Conover was an equity research analyst covering the healthcare sector for Raymond James, Bank of Montreal, and Tucker Anthony.

Conover holds bachelor’s and master’s degrees in finance from the University of Wisconsin and was a member of its Applied Security Analysis Program. He also holds the Chartered Financial Analyst® designation.

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