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AbbVie and Peers: Analyst Recommendations in December

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Jan. 7 2018, Updated 9:00 a.m. ET

Financial performance in 3Q17

In 3Q17, AbbVie (ABBV) reported revenues of ~$7.0 billion, which represents a YoY (year-over-year) operational rise of 8.8%. This didn’t include the 70-basis-point favorable impact due to foreign currency fluctuations.

AbbVie reported adjusted EPS earnings per share of ~$1.41 in 3Q17, which represents a YoY growth of 16.5%. The company’s adjusted EPS also saw a $0.02 benefit from divestitures of equity. Favorable sales growth trends coupled with robust improvement in operating margins has helped improve the company’s financial performance in 3Q17.

AbbVie reported adjusted gross margin of ~80.8% in 3Q17, despite the dilutive impact of ~50 basis points due to partnership accounting. The company witnessed a YoY rise of 50 basis points in R&D (research and development) spending, which accounted for 17% of total sales in 3Q17.

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AbbVie managed to drive down its adjusted SG&A (selling, general, and administrative) expenses to 20.7% of revenues, which represented a YoY fall of 70 basis points, by leveraging on sales and introducing operating efficiencies. This was a key factor in boosted AbbVie’s adjusted operating margin to 43.1% in 3Q17, which was a YoY rise of 30 basis points.

Analyst recommendations for AbbVie

Of the 22 analysts covering AbbVie stock in December 2017, five recommend a “strong buy,” while six recommend a “buy,” and 11 recommend a “hold.”

Analyst recommendations for peers

Of the 32 analysts covering Amgen (AMGN) stock in December 2017, 42.3% recommend a “buy,” while ~57.6% of the analysts covering Celgene (CELG) stock recommend a “buy,” and 48.3% of the 29 analysts tracking Gilead Sciences (GILD) recommend a “buy.”

Notably, AbbVie accounts for 0.58% of the Vanguard Total Stock Market ETF’s (VTI) total portfolio holdings.

In the next part of this series, we’ll discuss AbbVie’s revenue growth estimates in greater detail.

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