Should AbbVie Stock Be in Your Portfolio Pre-Q3 Earnings?

AbbVie ABBV is set to report third-quarter earnings on Oct. 30, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $14.28 billion and $2.93 per share, respectively.The company’s earnings estimates have declined from $10.87 per share to $10.86 for 2024 in the past 60 days. During the same timeframe, estimates for 2025 have increased from $12.09 to $12.10. Image Source: Zacks Investment ResearchStay up-to-date with all quarterly releases: See Zacks Earnings Calendar.ABBV’s Earnings Surprise HistoryThe company’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 2.39%. Image Source: Zacks Investment ResearchWhat Our Model Predicts for ABBVPer our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or#3 (Hold) have a goodchance of delivering an earnings beat. This is not the case here. You can uncover the best stocksto buy or sell before they’re reported with our Earnings ESP Filter.AbbVie has an Earnings ESP of -0.28% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping ABBV’s Upcoming ResultsAbbVie’s top line is being driven by sales of new immunology drugs, Skyrizi and Rinvoq. Approvals in new indications have been driving strong revenues for both these drugs. In July, Skyrizi’s label was expanded in the EU in ulcerative colitis (UC) indication. This might have boosted sales further in the third quarter.The Zacks Consensus Estimate for Skyrizi sales is pegged at $2.96 billion, while the same for Rinvoq is pinned at $1.55 billion. Our model estimates for Skyrizi and Rinvoq sales are pegged at $2.96 billion and $1.53 billion, respectively.AbbVie lost patent protection for its blockbuster immunology drug Humira in the United States in January 2023 and has been facing sales erosion ever since. The drug lost exclusivity in ex-U.S. territories in 2018. The Zacks Consensus Estimate for Humira sales is pegged at $2.35 billion, while our estimate for the same is pinned at $2.31 billion.We expect J&J JNJ-partnered Imbruvica sales to have declined due to competition from novel oral therapies. The Zacks Consensus Estimate and our model estimates for the J&J-partnered drug’s sales are pegged at $775 million and $763 million, respectively.Roche RHHBY-partnered Venclexta sales are likely to have risen as new patient starts might have improved. The Zacks Consensus Estimate and our model estimates for the Roche-partnered drug’s sales are pegged at $637 million and $627 million, respectively.Sales of the neuroscience franchise have shown strong growth in recent quarters. The top line is likely to have been driven by the depression drug Vraylar and the recently approved migraine drugs — Ubrelvy and Qulipta. The Zacks Consensus Estimate and our model estimate for neuroscience product sales are pegged at $2.33 billion each.In the aesthetics franchise, we expect overall sales to have risen slightly owing to an anticipated recovery in demand for fillers. The Zacks Consensus Estimate and our model estimate for aesthetics product sales are pegged at $1.34 billion and $1.33 billion, respectively.ABBV’s Stock Price Performance & ValuationYear to date, the stock has risen 22.4% compared with the industry‘s 18.8% growth. The stock has also outperformed the sector and the S&P 500. AbbVie’s shares are also currently trading above its 200-day moving average.ABBV Stock Outperforms Industry, Sector & S&P 500 Image Source: Zacks Investment ResearchFrom a valuation standpoint, AbbVie appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 15.97 forward 12-month earnings value, lower than 18.75 for the industry. The stock is cheaper than some other large drugmakers like Eli Lilly LLY and Novo Nordisk NVO. Image Source: Zacks Investment ResearchInvestment ThesisAbbVie faces its share of headwinds like Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and slow market growth trends for fillers in the United States and China. However, the strong sales performance of drugs like Rinvoq, Skyrizi, Venclexta and Vraylar, coupled with significant contributions from newer drugs Ubrelvy, Elahere, Epkinly and Qulipta, should keep driving the company’s top line.AbbVie expects its ex-Humira growth drugs, which cover more than 80% of its total sales, to outperform its initial expectations, driven by strong performance in immunology and oncology. It expects its ex-Humira growth platform to deliver nearly $6 billion of sales growth in 2024. Importantly, the erosion in Humira sales in the United States has been lower than management’s expectations.Stay Invested in ABBV StockDespite its fair share of problems, this Zacks Rank #3 company demonstrates growth potential. While AbbVie is generating decent sales and profit growth from the sale of key drugs and new ones, it has also been actively pursuing collaboration and partnership deals across several therapeutic areas to drive long-term growth. It also has an attractive pipeline.Investors who own this stock may stay invested as AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and might return to robust growth next year. Buying AbbVie’s stock at its present reasonable valuation may prove beneficial for long-term investors. Any major decline in the company’s share price could be an opportunity for long-term investors to add ABBV to their portfolio.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Roche Holding AG (RHHBY): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. 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