AbbVie (NYSE:ABBV) stock has demonstrated remarkable resilience in 2025, posting a 22% gain while the S&P 500 has declined 2%. As ongoing trade tensions fuel concerns about economic stability, investors are increasingly gravitating toward defensive sectors, particularly pharmaceuticals, with the S&P Healthcare index climbing 8% year-to-date.
The market’s confidence in AbbVie stems primarily from exceptional growth in its immunology portfolio, specifically Skyrizi and Rinvoq. The company’s impressive Q4 performance has further bolstered investor sentiment. Additionally, AbbVie has now positioned itself in the high-growth obesity treatment market through a recently announced licensing partnership with Gubra.
After its recent rise, ABBV stock looks relatively expensive – making it an expensive pick to buy at its current price of around $215. We believe there are some minor concerns with ABBV stock, which makes it relatively expensive given that its current valuation looks very high.
We arrive at our conclusion by comparing the current valuation of ABBV stock with its operating performance over the recent years, as well as its current and historical financial condition. Our analysis of AbbVie along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a strong operating performance and financial condition, as detailed below. For those seeking growth with reduced single-stock volatility, the High-Quality portfolio presents an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How does AbbVie’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, ABBV stock looks expensive compared to the broader market.
• AbbVie has a price-to-sales (P/S) ratio of 6.6 vs. a figure of 3.2 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 31.1 compared to 24.3 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 19.7 vs. the benchmark’s 24.3
How have AbbVie’s revenues grown over recent years?
AbbVie’s Revenues have grown marginally over recent years.
• AbbVie has seen its top line grow at an average rate of 0.2% over the last 3 years (vs. increase of 6.9% for S&P 500)
• Its revenues have grown 3.7% from $54 Bil to $56 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
• Also, its quarterly revenues grew 5.6% to $15 Bil in the most recent quarter from $14 Bil a year ago (vs. 5.0% improvement for S&P 500)
How profitable is AbbVie?
AbbVie’s profit margins are much higher than most companies in the Trefis coverage universe.
• AbbVie’s Operating Income over the last four quarters was $12 Bil, which represents a high Operating Margin of 21.1% (vs. 13.0% for S&P 500)
• AbbVie’s Operating Cash Flow (OCF) over this period was $19 Bil, pointing to a high OCF-to-Sales Ratio of 33.4% (vs. 15.7% for S&P 500)
Does AbbVie look financially stable?
AbbVie’s balance sheet looks fine.
• AbbVie’s Debt figure was $67 Bil at the end of the most recent quarter, while its market capitalization is $379 Bil (as of 3/7/2025). This implies a strong Debt-to-Equity Ratio of 18.2% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $5.6 Bil of the $135 Bil in Total Assets for AbbVie. This yields a poor Cash-to-Assets Ratio of 4.1% (vs. 14.8% for S&P 500)
How resilient is ABBV stock during a downturn?
ABBV stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• ABBV stock fell 23.3% from a high of $174.96 on 10 April 2022 to $134.21 on 2 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 7 February 2024
• Since then, the stock has increased to a high of $214.29 on 9 March 2025
Covid Pandemic (2020)
• ABBV stock fell 32.1% from a high of $94.96 on 23 February 2020 to $64.50 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 9 June 2020
Putting all the pieces together: What it means for ABBV stock
In summary, AbbVie’s performance across the parameters detailed above are as follows:
• Growth: Neutral
• Profitability: Very Strong
• Financial Stability: Neutral
• Downturn Resilience: Neutral
• Overall: Neutral
But given its very high valuation, the stock appears relatively expensive, which supports our conclusion that ABBV is an expensive stock to buy.
The rich valuation of ABBV stock limits its upside potential in the near-to-mid term. As an alternative, the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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