Illinois-headquartered pharmaceutical firm AbbVie (NYSE:ABBV) never ceases to innovate in the healthcare market. A big-bank analyst just raised his price target on ABBV stock and AbbVie’s diversified product portfolio enhances the company’s value to both patients and shareholders.
Inflation is running hot and equities traders are worried about what the Federal Reserve will do next. Amid such an uncertain environment, investors should stick to high-conviction holdings. Pick out the best and filter out the rest. AbbVie is certainly among the best pharmaceutical companies on the market.
As we’ll discover, AbbVie is making strides in advancing a crucially important spinal-condition treatment in the E.U. At the same time, AbbVie has plenty of other products to bulk up the company’s highly diversified portfolio.
What’s Happening With ABBV Stock?
ABBV stock has been in a holding pattern lately. Buyers attempted to break the stock above $175 in April, but pulled it back. Since then, it has been range-bound. That’s not unusual during the low-volume summertime weeks. Perhaps the buyers will be motivated to make a move on Jul. 29 when AbbVie reports its second-quarter 2022 earnings data.
It is fine to wait for that day to pass before making a decision on ABBV stock. However, you don’t have to wait if you have a long-term investment time frame. After all, AbbVie pays a nice 3.67% forward annual dividend yield, so a buy-and-hold position has its benefits.
Furthermore, AbbVie’s trailing 12-month price-to-earnings ratio is quite reasonable at 21.6. In other words, there’s something here to entice both income-focused and value-seeking investors.
Indeed, there could be an upside re-rating on the horizon. Analysts at Morgan Stanley (NYSE:MS) seem to think so, as they’ve assigned an “overweight” rating and a lofty $192 price target on ABBV stock.
Morgan Stanley analyst Terence Flynn acknowledged that AbbVie could face competition now that the company has lost exclusivity in the U.S. with rheumatoid arthritis drug Humira. However, AbbVie is diversifying away from Humira and shouldn’t be entirely reliant on it.
Immunology drugs Skyrizi and Rinvoq will help AbbVie in its efforts to maintain a broad array of products. Additionally, AbbVie’s Allergan business could build an aesthetics franchise, thereby providing even more product-portfolio diversification.
On top of all that, AbbVie’s axial spondyloarthritis treatment, upadacitinib/Rinvoq, was just recommended for approval in the E.U. by the European Medicines Agency’s Committee for Medicinal Products for Human Use. Axial spondyloarthritis is, according to AbbVie, a “chronic inflammatory disease that affects the spine, causing back pain, limited mobility, and structural damage.”
A decision on RINVOQ by the European Commission is expected in the current quarter. So, it shouldn’t be too long before AbbVie’s investors might have a major regulatory win to get excited about.
What You Can Do Now
There is no shortage of reasons to invest in AbbVie now. The company pays a healthy dividend and ABBV stock is trading at a very reasonable valuation.
Moreover, AbbVie is diversifying its product offerings beyond the blockbuster drug Humira. Rinvoq, in particular, looks promising in the E.U. Investors can, therefore, choose to purchase AbbVie shares today or wait until the company’s upcoming earnings report has been released.
AbbVie currently scores an “A” rating on my Portfolio Grader.
— Louis Navellier and the InvestorPlace Research Staff
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Source: Investor Place