Key Factors
AbbVie’s therapy for patent-cliff woes is working and has the corporate on monitor to return to progress quickly. 
Humira continues to outperform, and the non-Humira portfolio is extra strong than anticipated. 
The pipeline is powerful and amplified by lately introduced acquisitions anticipated to shut this yr. 
5 shares we like higher than AbbVie
AbbVie NYSE: ABBV is popping an vital nook in 2024 and is on monitor to renew progress. Its Humira-related patent cliff apart, the enterprise is stronger than ever, and the patent cliff is extra of a bump than a steep drop. The takeaway for buyers is that Humira gross sales are resilient, medical doctors and sufferers stay gradual in switching to off-brand replicas, and the non-Humira portfolio is stronger than anticipated. The forecasts for gross sales of Rinvoq and Skrizi had been raised together with peak targets for up-and-comers Ubrelvy and Qlipta for migraines. 
“2024 is an thrilling yr for AbbVie, as we’re effectively positioned to completely take in Humira erosion and obtain modest operational income progress, adopted by a return to strong progress in 2025 and a excessive single-digit CAGR by way of the tip of the last decade.”
AbbVie has a stable quarter, guides for progress 
AbbVie had a stable quarter in This autumn regardless of softening Humira gross sales. The corporate reported $14.3 billion in web income for a decline of 5.4% that outpaced consensus by 190 foundation factors. The decline is due primarily to Humira gross sales, which outpaced consensus however fell 40%, dragging the Immunology portfolio down 12.3%. Weak spot was additionally seen within the Oncology phase, down 7.4%, however offset by beneficial properties in important medicine and segments. 
The corporate’s key Humira replacements, Rinvoq and Skyrizi, grew by 63% and 52%, making up greater than 25% of gross sales, respectively. Neurology grew by 22% on a single-digit enhance in Botox, a 15% enhance in Ubrelvy and a 40% enhance in Vraylar gross sales. Aesthetics, together with Botox cosmetics, grew by 6.5%. 
Margin new is blended however in any other case favorable to shareholders. The GAAP and adjusted margin contracted in comparison with final yr because of elevated IP, RD and milestones related to acquisitions and offers. The web result’s a $0.15 headwind to the adjusted earnings that fully offset perceived weak spot. The adjusted $2.79 is down 22.5% YOY and in need of the Marketbeat consensus by a penny. 
Steering was raised, however there’s a caveat. The corporate raised its adjusted EPS goal above the earlier vary, however the high finish continues to be beneath the analysts’ consensus goal. The information serving to to elevate share costs is the outlook for a return to progress this yr and accelerating progress subsequent. The corporate additionally has a stable pipeline of candidates, with a number of milestones reached within the quarter. Moreover, the steering features a $0.32 affect from the anticipated closing of acquisitions, which was confirmed within the earnings launch. Acquisitions within the oncology and neurosciences arenas complement the prevailing portfolio and strengthen its non-Humira, non-immunology enterprise. Earnings could also be weaker than anticipated right now, however the firm is constructing leverage for long-term gross sales and margin. 
AbbVie’s capital return is secure
AbbVie is a higher-yielding inventory with a payout close to 3.7%, buying and selling at 15X earnings. The valuation is tough to pin down relative to friends; the vary is vast amongst pharma corporations, however it isn’t the very best, and AbbVie’s yield is above common. The payout is reliably secure at 50% of earnings and is predicted to develop. AbbVie has a decade of sustained will increase in its historical past and is technically a Dividend King due to its hyperlink to Abbott Laboratories. Will increase are working within the 9% vary and will proceed at a high-single-digit tempo for the following few years. 
The technical outlook is bullish, however there may be resistance to beat. The inventory is up following the discharge and increasing a development that started in late 2023. The market is approaching an all-time excessive; it’s already at a brand new closing excessive stage and will escape to new highs quickly. As a result of the analysts have been upgrading the inventory and elevating their worth targets, ABBV could maintain a rally that takes it to the $200 to $220 stage this yr. 
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