What to Look For in AbbVie Earnings

This is a top global pharmaceutical stock to buy at Jefferies and a franchise stock pick. 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 sharply last week 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 3% to 5% of the total patient population. Additionally, the next generation HCV product could be launched as early as 2017, and even if the entire Viekira Pak/Technivie business were lost over the next two years, it represents only 4% of net percentage value.

With numerous clinical read-outs for the stock over the rest of 2015, many on Wall Street think that over time the stock could have anywhere from $15 to $25 per share upside from current levels. The Jefferies report points out that several updates on the Humira franchise are expected in 2015, including more visibility on the issued and pending patent estate for Humira and an update on the clinical profile of “new Humira,” which is expected to launch in the last half of 2015. EU approval is expected soon.

Ahead of the earnings report, a few analysts weighed in on AbbVie:

• Citigroup reiterated a Neutral rating and lowered its price target to $56 from $60.
• JPMorgan reiterated a Buy rating.
• Jefferies reiterated a Buy rating with an $85 price target.
• Cowen reiterated an Outperform rating.

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So far in 2015, AbbVie has underperformed the market, with the stock is down nearly 16% year to date. Over the course of the past 52 weeks, the stock is down 9.7%.

Shares of AbbVie were trading up 1.3% at $53.97 midday Thursday, with a consensus analyst price target of $74.07 and a 52-week trading range of $45.45 to $71.60.