A Fresh Look at AbbVie’s (ABBV) Valuation After Q3 Results, Margin Decline, and Dividend Boost

AbbVie delivered third-quarter results that beat analyst expectations for both revenue and earnings per share, driven by continued strength in its immunology and neuroscience portfolios. However, headlines also focused on the company’s operating margin drop and reduced full-year earnings guidance.

See our latest analysis for AbbVie.

This flurry of news comes as AbbVie’s share price has climbed 22% year-to-date, while its 1-year total shareholder return stands at nearly 14%. Strong product milestones and a fresh 5.5% dividend boost have helped offset concerns about margins and the recent intangible asset write-down. Long-term investors are still sitting on a remarkable 169% five-year total return. Momentum is still building, even as the company navigates shifting risks and opportunities.

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With shares up sharply and new milestones announced, the key question now is whether AbbVie’s valuation reflects all this progress or if the current uncertainty has created a real opportunity for long-term investors to buy in before future growth is fully priced in.

Most Popular Narrative: 9.2% Undervalued

With AbbVie closing at $219.16, the most widely tracked narrative calls for a higher fair value, pointing to continued strength in leading drug franchises and new product launches as the main sources of optimism. The narrative’s valuation outlook contrasts sharply with lingering margin and pipeline worries. This invites readers to examine the full analysis behind this modest discount.

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.

Read the complete narrative.

Curious what growth assumptions make this possible? The narrative builds its fair value on sky-high projections for future profits and margins. Think blockbuster therapies, global expansion, and a major bet on sustained leadership. The numbers behind this implied value are anything but ordinary. Want to uncover the bold financial roadmap analysts believe AbbVie could deliver? Dive into the narrative for the details that set this outlook apart.

Result: Fair Value of $241.29 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a reversal could occur if core drugs lose exclusivity faster than expected or if regulatory pressures on drug pricing intensify in major markets.

Find out about the key risks to this AbbVie narrative.

Build Your Own AbbVie Narrative

If you’re not convinced by the current outlook or enjoy digging into the numbers yourself, you can craft your own narrative in just a few minutes. Do it your way

A great starting point for your AbbVie research is our analysis highlighting 2 key rewards and 5 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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