AbbVie (NYSE: ABBV) recently released its Q4 results, with revenues and earnings comfortably above the street estimates. It reported sales of $15.1 billion and adjusted earnings of $2.16 per share, compared to the consensus estimates of $14.8 billion and $2.11, respectively. AbbVie continued to benefit from strong sales growth for Rinvoq and Skyrizi. The company’s outlook was also better than the estimates, faring well for its stock.
ABBV stock, with 24% returns since the beginning of 2024, has marginally underperformed the S&P 500 index, up 27%. An increased competition and a mid-stage clinical trial failure for schizophrenia treatment last year are some of the factors that have weighed on its stock price growth lately. But, if you want upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
How Did AbbVie Fare In Q4?
AbbVie’s revenue of $15.1 billion in Q4 reflected a 5.6% y-o-y growth. Looking at immunology, while Humira sales plunged 49% to $1.7 billion, Skyrizi sales surged 58% to $3.8 billion and Rinvoq sales grew 46% to $1.8 billion. Oncology sales growth of 12% was bolstered by higher Venclexta sales. Neuroscience sales benefited from gains in Qulipta and Ubrelvy.
Overall, AbbVie has been able to more than bridge the gap from falling Humira sales, as it faces biosimilar competition. Skyrizi and Rinvoq are used to treat plaque psoriasis and rheumatoid arthritis, and they have been gaining market share lately. AbbVie’s bottom line of $2.16 reflects a 23% y-o-y decline. This can be attributed to a one-time charge of $0.88 per share toward acquired IPR&D and milestone expenses.
Looking forward, AbbVie expects its 2025 earnings to be $12.22 at the mid-point of the provided range, versus the $12.18 consensus estimate. The company continues to project high single-digit compound annual revenue growth through 2029, while simultaneously boosting its 2027 revenue expectations for Skyrizi and Rinvoq by $4 billion.
What Does This Mean For ABBV Stock?
Amid a Q4 beat and solid outlook, ABBV stock surged 5% post the results announcement. However, looking at a slightly longer time frame, the increase in ABBV stock over the last four-year period has been far from consistent, although annual returns were considerably less volatile than the S&P 500. Returns for the stock were 32% in 2021, 24% in 2022, 0% in 2023, and 19% in 2024.
In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, is less volatile. And it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
As markets grapple with uncertainty surrounding interest rate policies and newly imposed tariffs on Mexico, Canada, and China, is ABBV likely to mirror its underperformance versus the S&P 500 from 2023 and 2024 this year, or are we positioned for an upswing? Despite its recent rise, ABBV appears to have more room for growth. At its current levels of $184, it trades at 5.8x trailing revenues, slightly higher than the stock’s average P/S ratio of 5.0x over the last three years. However, a rise in valuation multiple for ABBV seems justified, given how the company has bridged the gap from falling Humira sales and positioned itself for strong growth in the coming years.
While ABBV stock looks like it may see higher levels, it is helpful to see how AbbVie’s peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
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