AbbVie (ABBV) Valuation in Focus After Landmark FDA Approval for EPKINLY Combination Therapy

AbbVie (ABBV) just secured FDA approval for its EPKINLY therapy combined with rituximab and lenalidomide, targeting relapsed or refractory follicular lymphoma. This marks a significant milestone for the company’s oncology portfolio.

See our latest analysis for AbbVie.

AbbVie’s latest FDA win follows a string of prominent updates this month, including a new Canadian approval for LUPRON DEPOT and the launch of its “Second Winds” cancer patient film. Momentum is clear. After a strong run, the stock’s total return over the past year sits at an impressive 32.4%, with gains continuing to build over three and five years.

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But with the stock trading just below analyst price targets and boasting robust returns, investors may wonder whether AbbVie is currently undervalued or if the market has already priced in the company’s growth prospects from these latest approvals.

Most Popular Narrative: 4.8% Undervalued

AbbVie's consensus fair value is $243.55 per share, modestly above its recent close of $231.80, indicating a slight undervaluation in the eyes of analysts. The narrative behind this price target centers on ongoing developments within AbbVie's product pipeline and profitability outlook.

AbbVie's diversified and expanding late-stage and early-stage pipeline, coupled with consistent business development activity (for example, Capstan in vivo CAR-T, Gubra amylin analog for obesity, and next-generation siRNA platforms), positions the company to capitalize on the increasing adoption of biologics and specialty pharmaceuticals. This can reinforce premium pricing and protect net margins.

Read the complete narrative.

What is the real engine driving this optimistic fair value? The projections powering the narrative rest on a bold profit turnaround and an industry-defying profit multiple. Curious what numbers analysts are betting on to justify this premium? The answers in their full story may surprise you.

Result: Fair Value of $243.55 (UNDERVALUED)

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

However, challenges such as patent expirations for key drugs and tightening global drug pricing could quickly threaten AbbVie’s current growth momentum.

Find out about the key risks to this AbbVie narrative.

Another View: What Does Our DCF Model Say?

While analyst price targets suggest AbbVie is only modestly undervalued, our DCF model offers a more bullish perspective. It estimates fair value at $429.10 per share, meaning AbbVie could be trading at a substantial 46% discount. This significant gap raises new questions about how the market is pricing long-term growth risk versus opportunity.

Look into how the SWS DCF model arrives at its fair value.

Build Your Own AbbVie Narrative

If you have a different perspective or want to draw your own conclusions from the numbers, crafting a personal narrative takes less than three minutes. Why not give it a try with 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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