American pharmaceutical giant AbbVie (ABBV) abruptly lowered its Q3 and full year Fiscal 2024 earnings expectations owing to higher R&D (research and development) charges. The company is projecting acquired IPR&D and milestone expenses of $82 million (pre-tax) in Q3. These charges could be incurred upon execution of collaborations, licensing agreements, and other asset acquisitions. Hence, AbbVie had not included them during its earlier guidance. ABB shares slipped more than 1% in intraday trading yesterday on the guidance update.
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The added pre-tax charges will result in a $0.04 per share impact on both normal and adjusted earnings per share for the third quarter. Accordingly, AbbVie now projects adjusted EPS for Q3 in the range of $2.88 to $2.92, down from $2.92 to $2.96 forecasted earlier. Similarly, for FY24, adjusted EPS is now expected in the range of $10.67 to $10.87, down from the prior guidance range of $10.71 to $10.91.
Insights From TipRanks’ Bulls Say, Bears Say Tool
AbbVie is set to release its Q3 FY24 results on October 30. The Street expects AbbVie to post adjusted earnings per share of $2.95 on revenue of $14.27 billion.
According to TipRanks’ Bulls Say, Bears Say tool, bulls are optimistic about AbbVie’s solid pipeline of drugs, including the addition of schizophrenia drug Emraclidine through the Cerevel Therapeutics acquisition. Also, analysts noted positive top-line results from ABBV’s Parkinson’s disease drug (tavapadon) and higher sales from other popular drugs such as Rinvoq, Skyrizi, Vraylar, and Venclexta.
Meanwhile, Bears are concerned about the pressure on the Aesthetics Segment’s sales.
Is ABBV a Good Stock to Buy?
Wall Street remains divided on AbbVie stock. On TipRanks, ABBV stock has a Moderate Buy consensus rating based on ten Buys versus five Hold ratings. The average AbbVie price target of $199.08 implies 1.9% upside potential from current levels. Year-to-date, ABBV shares have gained 29.7%.
