Why AbbVie Stock Stumbled Today Despite the Earnings Beat

Core Viewpoint - AbbVie is facing challenges due to the decline in sales of its leading drug Humira following patent expiration, but the performance of its newer drugs Skyrizi and Rinvoq is promising, leading to a mixed market reaction despite better-than-expected earnings and sales results [1][2][3]. Group 1: Financial Performance - AbbVie reported first-quarter sales of $12.3 billion, flat year over year, with earnings per share of $2.31, down from $2.46 a year prior, surpassing analysts' expectations of $2.23 per share on revenue of $11.9 billion [2]. - The company has raised its earnings per share guidance for 2024 to a range of $11.13 to $11.33, up from a previous range of $10.97 to $11.17, while analysts' consensus is slightly lower at $11.12 per share [2]. Group 2: Drug Performance - Sales of Skyrizi increased by 47.6% year over year, while Rinvoq's revenue rose by 59.3%, helping to offset Humira's 35.9% sales decline [2]. - Humira generated $14.4 billion in revenue last year, making it one of the world's best-selling drugs, and its decline will significantly impact AbbVie [4]. Group 3: Market Sentiment and Valuation - Despite the positive performance of newer drugs, investors remain concerned about the potential for accelerated declines in Humira sales, leading to a 4.6% drop in AbbVie’s stock on the day of the earnings report [1][3]. - AbbVie’s stock is currently trading at a valuation of around 14 times this year's expected earnings, which is considered a fair entry point for new investors, especially given the stock's 12% decline from its late-March peak [4][5].