Is ABBV Stock a Buy, Hold, or Sell After Its Almost 23% Rise YTD?

Core Insights - AbbVie (ABBV) has seen a stock increase of 22.5% in 2025, outperforming the industry, sector, and S&P 500 index, which has seen a decrease of 0.1% [1][3][8] Company Performance - The strong stock performance is attributed to rising investor optimism as AbbVie successfully navigated the loss of exclusivity for its blockbuster drug, Humira, which previously accounted for over 50% of total revenues [4][5] - AbbVie launched two successful immunology drugs, Skyrizi and Rinvoq, which are performing well and expected to support top-line growth in the coming years [5][8] - Combined sales of Skyrizi and Rinvoq reached $11.6 billion in the first half of 2025, with projections of over $25 billion in 2025 and more than $31 billion by 2027 [7][8] Drug Performance - Skyrizi is annualizing at almost $18 billion, while Rinvoq is at over $8 billion, with both drugs showing strong performance in the inflammatory bowel disease market [8][9] - AbbVie expects to file for new indications for Rinvoq, which could add approximately $2 billion to peak-year sales [10][11] Oncology and Neuroscience Contributions - AbbVie's oncology segment generated $3.3 billion in the first half of 2025, driven by higher sales of Venclexta and contributions from new drugs [12] - Sales in the neuroscience portfolio increased by 20.3% to nearly $5 billion, supported by products like Botox Therapeutic and newer migraine treatments [13] Acquisition Strategy - AbbVie has executed over 30 M&A transactions since early 2024, focusing on immunology, oncology, and neuroscience to strengthen its pipeline [14] - Recent acquisitions include a licensing agreement for a treatment for obesity and a deal for a novel therapy for major depressive disorder [14][15] Challenges - Humira's sales are declining significantly due to biosimilar competition, with a more than 50% drop in the first half of 2025 [16] - Sales of Juvederm fillers have also decreased by 22.2% due to macroeconomic challenges and weakened consumer sentiment [17] Valuation and Estimates - AbbVie shares trade at a price/earnings ratio of 15.93, higher than the industry average of 14.78, indicating a relatively high valuation [18][19] - The Zacks Consensus Estimate for 2025 earnings has slightly decreased from $12.08 to $12.02, while the estimate for 2026 has increased from $14.07 to $14.33 [22] Future Outlook - AbbVie is expected to return to mid-single-digit revenue growth in 2025, driven by the performance of Skyrizi and Rinvoq, with no significant loss of exclusivity events anticipated for the rest of the decade [25][26] - The company is well-positioned for continued growth, supported by a solid pipeline and recent patent settlements [26][27]