What to Look For in AbbVie Earnings

AbbVie Inc. (NYSE: ABBV) is scheduled to report its fourth-quarter financial results before the markets open Friday. The consensus estimates from Thomson Reuters are calling for $1.12 in earnings per share (EPS) on $6.39 billion in revenue. In the same period of the previous year, it posted EPS of $0.89 and $5.37 billion in revenue.

This is one of the top global pharmaceutical stocks at Jefferies and is also on the firm’s Franchise Stock Picks list. AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries.

The stock fell 10% in late October after an FDA warning about liver risk with the company’s hepatitis C (HCV) products. However, Jefferies points out that this applies to a small sub-population of cirrhotics who are 5% or less of the total patient population. Additionally, the next generation HCV product could be launched as early as 2017, and even of the entire Viekira Pak/Technivie business were lost over the next two years, it represents only 4% of net percentage value. The company announced last week that the supplemental New Drug Application for Viekira Pak to be used without ribavirin has been accepted by the FDA with priority review.
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Jefferies has a Buy rating for AbbVie, as well as an $80 price target, implying upside of 43% from the current price level.

Prior to the release of the earnings report, a few other analysts weighed in on the pharma giant:

• BMO Capital Markets has an Outperform rating with a $70 price target.
• Credit Suisse reiterated an Outperform rating.
• Morgan Stanley reiterated a Buy rating.

So far in 2016, AbbVie has outperformed the market, with the stock down about 3% year to date. Over the past 52 weeks, the stock is down over 6%.

Shares of AbbVie were trading Thursday at $56.00, with a consensus analyst price target of $72.67 and a 52-week trading range of $45.45 to 71.60.