The Correction In AbbVie Stock Could Be Nearing An End

AbbVie (ABBV) shares, a $92B pharmaceutical company which has products that treat Crohn’s disease, Parkinson’s disease, thyroid disease, rheumatoid arthritis, and other chronic auto-immune diseases, are on pace for their seventh consecutive weekly loss. This week’s tumble comes after the $148B Gilead Science announced an increase in the amount of discounts to their Hep C drug, Sovalid, this year. The news sent the overall biotech sector down by an average of 1.65%.


AbbVie shares trade at a P/E ratio of 12.85x (2015 estimates) with 33.4% EPS growth, a price to sales ratio of 4.85x, and a price to book ratio of 21.15x. Revenue is likely to rise 15.5% this year and another 8.2% in 2016 to $25B. On January 30th, the maker of AndroGel and Humira reported Q4 EPS of $0.89 vs the $0.86 estimate on revenue of $5.37B vs the $5.35B estimate. Humira sales jumped 10.6% in the quarter, which helped gross margins expand 410 basis points to 81.2%. Its Hep C drug, Viekira, did $48M in sales since being approved in December.

Wall Street analysts remain bullish on ABBV with an average analyst price target of $71.50 (12 buy ratings and five hold ratings). On February 3rd, Jefferies Group kept their buy rating, but lowered the price target to $80 from $82.

Technical Analysis



To read Mitchell’s Unusual Options Activity Report featuring Autodesk (ADSK), please click here.