AbbVie: What's Happening With ABBV Stock?

Core Insights - AbbVie has reached a significant agreement with generic drug manufacturers to delay the release of a generic version of its drug Rinvoq until 2037, which is expected to maintain its market dominance and potentially increase peak sales to over $12 billion [2] - AbbVie's stock has risen 18% this year, trading around $220 per share, but is still considered a strong buy due to solid financials and operations [2] - The company reported $6 billion in sales for Rinvoq last year, with a year-over-year growth of 50%, and $3.7 billion in sales in the first half of this year [2] Financial Performance - AbbVie's revenues have grown from $55 billion to $58 billion in the last 12 months, reflecting a growth rate of 6.1%, compared to 5.1% for the S&P 500 [6] - The company's quarterly revenues increased by 6.6% to $15 billion in the most recent quarter [6] - AbbVie's operating income over the last four quarters was $14 billion, with an operating margin of 23.5%, higher than the S&P 500's 18.6% [13] Valuation Metrics - AbbVie has a price-to-sales (P/S) ratio of 6.8, compared to 3.2 for the S&P 500, and a price-to-earnings (P/E) ratio of 104.8 versus 24.1 for the benchmark [6] - The company's price-to-free cash flow (P/FCF) ratio stands at 21.6, slightly above the S&P 500's 21.2 [6] - Despite a higher valuation, AbbVie is seen as a solid long-term investment with expected revenue growth improvement [11] Debt and Cash Position - AbbVie's debt was reported at $70 billion, with a market capitalization of $374 billion, resulting in a debt-to-equity ratio of 17.9%, which is favorable compared to the S&P 500's 20.9% [13] - The company holds $6.5 billion in cash, which constitutes a cash-to-assets ratio of 4.7%, lower than the S&P 500's 7.0% [13] Market Resilience - AbbVie's stock has shown resilience during downturns, performing slightly better than the S&P 500 in recent market declines [8] - The stock has fully recovered from previous declines, indicating strong recovery potential [14]