Last Update27 Sep 25Fair value Increased 4.50%
AbbVie’s consensus price target has been raised from $217.45 to $227.22, as analysts highlight the value added by the extended Rinvoq patent runway, top- and bottom-line beats, pipeline expansion through the Bretisilocin acquisition, and underappreciated royalty streams.
Analyst Commentary
- Bullish analysts cite a substantial extension of Rinvoq’s U.S. patent runway through favorable settlement, delaying generic entry until 2037—4 years beyond prior expectations—and modeling this as adding $11-$24 per share in value.
- Upward price targets reflect top- and bottom-line beats in recent quarters and raised 2025 guidance, led by momentum in key growth drivers such as Skyrizi and the neuroscience portfolio, despite ongoing macro headwinds for the aesthetics business.
- The proposed acquisition of Bretisilocin, an innovative neuropsychiatric therapy with strong Phase 2a data for Major Depressive Disorder, is seen as a meaningful addition to AbbVie’s pipeline, enhancing its Neuro franchise and broadening future growth prospects.
- Bullish analysts highlight underappreciated royalty revenue potential from partnered assets like Epkinly in aggressive and indolent lymphomas, which could drive multi-billion dollar upside not currently reflected in consensus estimates.
- Recent hidradenitis suppurativa trial data for AbbVie’s pipeline assets validates the therapeutic approach but also delineates efficacy limitations, influencing sentiment on related competitors while reinforcing AbbVie’s scientific and commercial positioning.
What's in the News
- AbbVie announced the proposed acquisition of Bretisilocin from Gilgamesh Pharmaceuticals in a deal valued up to $1.2B, to bolster its Neuro pipeline (Raymond James).
- Bretisilocin, Gilgamesh’s lead asset, is in Phase 2 for Major Depressive Disorder, demonstrating a novel mechanism of action with compelling efficacy and safety data in recent Phase 2a trials (Raymond James).
- The acquisition is expected to create synergies within AbbVie’s Neuro franchise, particularly in the large MDD market, as highlighted by Raymond James, which maintains its Outperform rating on AbbVie (Raymond James).
- The acquisition was not a surprise, as earlier reports and an existing collaboration between AbbVie and Gilgamesh were already in place for preclinical psychiatric assets (Raymond James).
- Bloomberg reports AbbVie is in ongoing discussions to acquire Gilgamesh Pharmaceuticals for about $1B, but notes the deal has not yet been finalized and discussions could still fall through (Bloomberg).
Valuation Changes
Summary of Valuation Changes for AbbVie
- The Consensus Analyst Price Target has risen slightly from $217.45 to $227.22.
- The Net Profit Margin for AbbVie has risen slightly from 28.55% to 29.48%.
- The Consensus Revenue Growth forecasts for AbbVie has risen slightly from 7.8% per annum to 7.9% per annum.
Key Takeaways
- Strong performance in immunology and neuroscience, supported by new product launches and expanding indications, helps offset losses from older drugs facing competition.
- Strategic pipeline development, international growth, and operational efficiency position the company to sustain profitability and adapt to evolving industry trends.
- Over-reliance on a few key drugs and therapeutic areas heightens risk from competition, regulatory changes, and underperformance in R&D or acquisitions, threatening earnings stability.
Catalysts
About AbbVie- A research-based biopharmaceutical company, engages in the research and development, manufacture, commercialization, and sale of medicines and therapies worldwide.
- Continued robust growth in immunology from Skyrizi and Rinvoq, buoyed by expanded prescribing across multiple high-need indications like IBD and dermatology, and further supported by ongoing launches and indication expansions, is likely to drive sustained top-line revenue growth and mitigate the impact of Humira's LOE.
- Advancements and strategic investments in neuroscience, including strong uptake of Vraylar, QULIPTA, Ubrelvy, and the emerging Parkinson's portfolio (e.g., VYALEV), align with growing demand for therapies addressing chronic neurological diseases in an aging population, supporting both revenue and long-term earnings stability.
- AbbVie's diversified and expanding late-stage and early-stage pipeline, coupled with consistent business development activity (e.g., Capstan in vivo CAR-T, Gubra amylin analog for obesity, next-gen siRNA platforms), positions the company to capitalize on the increasing adoption of biologics and specialty pharmaceuticals, which can reinforce premium pricing and protect net margins.
- International market expansion, evidenced by strong neuroscience launches and continued global share gains for Skyrizi and Rinvoq, provides opportunities for patient pool growth and revenue diversification as healthcare access broadens in emerging markets.
- Operational efficiency initiatives and focused cost management-alongside high adjusted gross and operating margins-are likely to sustain or improve net margins even as global pricing pressures mount, driving healthy underlying earnings growth.
AbbVie Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming AbbVie's revenue will grow by 7.7% annually over the next 3 years.
- Analysts assume that profit margins will increase from 6.4% today to 28.5% in 3 years time.
- Analysts expect earnings to reach $20.8 billion (and earnings per share of $11.87) by about September 2028, up from $3.7 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $15.9 billion.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.5x on those 2028 earnings, down from 99.8x today. This future PE is greater than the current PE for the GB Biotechs industry at 15.3x.
- Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 6.98%, as per the Simply Wall St company report.
AbbVie Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Loss of exclusivity and patent expirations for major products like HUMIRA-and eventual competitive pressures on follow-on blockbusters like Skyrizi and Rinvoq-could result in significant revenue declines as biosimilar and generic competition intensifies and erodes pricing power, directly impacting AbbVie's top-line growth and future earnings.
- Increasing global government focus on healthcare cost controls, drug price negotiations (such as the IRA in the US), and heightened regulatory scrutiny could lead to sustained pricing pressure, lower reimbursement rates, and rising compliance costs, putting downward pressure on net margins and earnings growth.
- Heavy reliance on a concentrated product portfolio (mainly immunology and neuroscience platforms) makes AbbVie vulnerable to pipeline setbacks, unforeseen safety concerns, or competitor breakthroughs in those therapeutic areas, which could destabilize long-term revenue and earnings diversification.
- Sustained weakness and volatility in the aesthetics business-driven by chronic macroeconomic headwinds, price-sensitive consumer trends, and shifting patient preferences-could limit recovery to historical growth rates and result in ongoing underperformance in that segment, negatively affecting revenue and margin contribution.
- Elevated R&D and acquisition spending needed to maintain future pipeline momentum introduces financial risk: if new therapies or recent strategic acquisitions (e.g., Capstan, Gubra) underperform or integration falls short, AbbVie could face pressured net margins and reduced return on investment, challenging its ability to drive long-term earnings growth.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $216.483 for AbbVie based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $255.0, and the most bearish reporting a price target of just $170.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $73.0 billion, earnings will come to $20.8 billion, and it would be trading on a PE ratio of 22.5x, assuming you use a discount rate of 7.0%.
- Given the current share price of $210.42, the analyst price target of $216.48 is 2.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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