AbbVie Earnings: Continued Impressive Demand for Skyrizi, Neuroscience Portfolio Support Growth

Key Morningstar Metrics for AbbVie

• Fair Value Estimate: $184.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of AbbVie’s Earnings

AbbVie ABBV reported second-quarter revenue of $15.4 billion (6.6% growth) and adjusted diluted earnings per share of $2.97 (12.1% growth). Management raised full-year revenue guidance to $60.5 billion from $59.7 billion and adjusted diluted EPS to $11.88-$12.08 from $11.67-$11.87.

Why it matters: Second-quarter performance was ahead of our expectations in immunology, where stellar Skyrizi sales more than countered the erosion in Humira sales as biosimilar versions of the drug made headway in the market.

• Despite significant erosion in sales of former top drug Humira, AbbVie’s top-line growth only dipped negative in 2023 and has continued to improve since, driven by market share gains for Skyrizi and Rinvoq across dermatology and inflammatory bowel disease indications.

The bottom line: We’re maintaining our $184 fair value estimate for wide-moat AbbVie. We see the shares as fairly valued at recent prices.

• We think AbbVie is capable of 8% top-line growth in 2025, slightly ahead of guidance, based on the continuing strong prospects for sales of immunology drugs Skyrizi and Rinvoq as well as double-digit growth for several neuroscience drugs, including new Parkinson’s therapy Vyalev.
• We’re assuming weaker-than-guided performance in aesthetics. Economic concerns are making patients less likely to pay for more expensive fillers, and trends toward a more natural appearance are also creating headwinds to growth.

Long view: With patent protection on Skyrizi and Rinvoq running through 2033, AbbVie has time to build a pipeline to dull the impact of its next big patent cliff. We’re watching for updates from several programs.

• The company’s $2 billion pending acquisition of Capstan Therapeutics (including a novel CAR-T cell therapy in phase 1 for autoimmune diseases) and recent licensing deal for Gubra’s amylin analog (in phase 1 for obesity) look intriguing and could make strong immunology and aesthetics additions by 2030.