ABBV
AbbVie Inc.$224.69
Sell
Target $151.23
Report: Mar 07, 2026Healthcare • Drug Manufacturers - General • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$224.69-32.7%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$151.23
(33% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$244.81
52 Week Low$164.39
Avg. 3 Month Volume7.23M
Efficiency
LTM Gross Margin70.2%
LTM EBITDA Margin28.4%
LTM EBIT Margin15.1%
LTM Operating Margin24.6%
LTM ROA3.1%
LTM ROE-361.6%
LTM ROIC13.6%
LTM ROCE9.6%
Capital Structure
Market Cap (MM)$384.6B
Enterprise Value (MM)$446.8B
Shares Outstanding1.77B
Total Debt (MM)$67.50B
Cash & Equivalents (MM)$5.23B
LTM Net Debt (MM)$62.27B
LTM Net Debt/EBITDA3.6x
Growth
TTM Rev. Growth8.6%
Last 3-Yr Rev. CAGR1.8%
Last 3-Yr EBITDA CAGR-10.2%
Last 3-Yr EPS CAGR-29.2%
Valuation
Street Target Price$256.15
LTM EV/Revenue7.3x
LTM EV/Gross Profit10.4x
LTM EV/EBIT48.5x
LTM EV/EBITDA25.7x
LTM P/E91.0x
LTM EV/FCF25.1x
LTM P/FCF21.6x
LTM P/TB8.4x
LTM P/B-117.6x
Dividend Yield3.1%
Payout Ratio281.8%
Executive SummarySituation: Current price is $224.69 versus fair value $151.23 (-32.7% expected return), and valuation confidence is stable. Debate: Bull case depends on Q3 2026 Skyrizi Sales Targets: Management has guided to $21.5 billion in Skyrizi sales for 2026. Bear case centers on Moat Erosion via IRA Pricing: The Inflation Reduction Act allows Medicare to negotiate prices on top-selling drugs. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The Skyrizi-Rinvoq platform delivers $25.9 billion in sales with 50% combined growth, successfully offsetting the Humira cliff. The $100 billion R&D commitment and entry into the obesity market via the Gubra amylin analog license provide long-term growth optionality.
Bear Case
Incremental ROIC is negative at -1.4%, indicating that the $29.9 billion spent on M&A is failing to generate value above the 9.5% cost of capital. Accelerating Humira erosion and IRA-mandated pricing pressure on Vraylar and Linzess will compress margins starting in 2027.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Q3 2026 Skyrizi Sales Targets: Management has guided to $21.5 billion in Skyrizi sales for 2026. A failure to hit this target would validate...
Mid-Term (6-18 months)Impact: Moderate
Obesity Pipeline Data: Phase 1 data for the amylin analog (ABBV-295) is expected in late 2026. Poor tolerability or efficacy results would r...
Long-Term (18+ months)Impact: Moderate
AbbVie is relevant for analysis now because the stock is trading at a multi-year high multiple (26.5x EV/EBITDA) just as founding CEO Gonzal...
Primary Risks
Concern: High
Moat Erosion via IRA Pricing: The Inflation Reduction Act allows Medicare to negotiate prices on top-selling drugs. Vraylar and Linzess are...
Concern: High
Capital Allocation Failure: The company's reliance on large-scale M&A to replace Humira revenue carries high integration risk. With M&A effe...
Concern: Medium
The stewardship verdict is 'Adequate for Income, Weak for Growth.' The board is strong, featuring financial experts like Frederick Waddell (...
Recent Activity
2025-10-01Press Release
+5.55%Natrelle® Awarded Supplier Agreement From Vizient
2025-05-14SEC Filing (8-K)
-5.62%AbbVie expands board, appoints Thomas Falk, and updates Michael's compensation.
2025-04-04Market Movement
-7.28%Market/Sector Move -7.28%
2024-10-30SEC Filing (8-K)
+6.36%AbbVie reports Q3 2024 results, completes Cerevel acquisition, and raises full-year guidance.
2024-04-04SEC Filing (8-K)
-5.32%AbbVie updates 2024 EPS guidance to include Q1 acquired IPR&D and milestones expense of $164M.
Valuation Table
9.8/10Decision Grade
Scenario Range
$103
Bear
$186
Bull
$225