Why Did AbbVie Stock Fall Despite FDA’s Approval?

AbbVie (NYSE: ABBV) has reported mixed results for the first quarter of 2022. Shares of the biopharmaceutical company fell 6.1% on April 29 to close at $146.88 after the company lowered its full-year 2022 guidance.

Result in Detail

Adjusted earnings of $3.16 per share grew 9.3% year-over-year and beat analysts’ expectations of $3.14 per share. Revenues rose 4.1% year-over-year to $13.5 billion but lagged consensus estimates of $13.6 billion.

The revenue growth reflects a surge in income across most of the reported segments with 6.9% growth in the Immunology portfolio, 19.2% in the Neuroscience portfolio, and 20.5% in the Aesthetics portfolio. The positives were partially offset by 1.6% lower sales in the Hematologic oncology portfolio.

During the quarter, AbbVie’s selling, general and administrative expenses stood at 23.1% of net revenues. Also, research and development expenses were 11.1% of net revenues. 

FY2022 Guidance

The company has lowered the financial guidance for FY2022. It forecasts adjusted earnings in the range of $13.92 to $14.12 per share, down from the previous guidance of $14 to $14.20. The consensus estimate for the same is pegged at $14.17 per share.

CEO’s Comments

AbbVie’s CEO Richard A. Gonzalez said, “This year is off to a strong start. Our first quarter results highlight the diversity of our portfolio and include compelling performance from key growth drivers Skyrizi, Rinvoq, Aesthetics and Neuroscience. Our momentum combined with ramping contributions from new products and new indications will drive accelerating revenue and EPS growth through the rest of the year.”

Rinvoq Update

Alongside earnings, the company announced that the U.S. Food and Drug Administration has approved Rinvoq, which has been designed to treat adults with active ankylosing spondylitis. The approval is supported by the data from two Phase 3 induction studies and one maintenance study.

Wall Street’s Take

Following the results, Mizuho Securities analyst Vamil Divan reiterated a Buy rating on AbbVie with a price target of $166 (13% upside potential).

Divan said, “Looking ahead, management reiterated confidence in the underlying business performing in line with their expectations, with strong performance anticipated across multiple key franchises.”

“We remain bullish on the AbbVie story given the more diversified growth we believe they are poised to deliver, although we acknowledge uncertainty around the impact of the upcoming Humira US loss of exclusivity will likely keep shares trading at a discount to its peers,” the analyst added.

Overall, the stock has a Moderate Buy consensus rating based on 10 Buys and five Holds. AbbVie’s average price target stands at $161.73, implying 10.1% upside potential from current levels.

Bloggers’ Stance

TipRanks data shows that financial blogger opinions are 95% Bullish on ABBV, compared to a sector average of 71%.

Conclusion

A decent year-over-year performance and the scope of top-line growth with support from the FDA’s approval for Rinvoq are likely to make AbbVie an attractive investment choice.

Discover new investment ideas with data you can trust.

Related News:
Amid Higher Costs & Expenses, Intel Posts Upbeat Q1 Results
Unilever Scathed as Inflation Hits Consumer Goods Sector
Moderna Seeks EUA to Vaccinate Young Children with mRNA-1273