Key Takeaways
AbbVie Inc. (ABBV) raised its full-year earnings forecast after first-quarter results beat analyst estimates, powered by surging sales of its newer immunology drugs that have successfully offset the decline of its legacy blockbuster Humira.
"The results reflect the strength of our immunology franchise," management said on the company's earnings call, highlighting strong physician adoption and market share gains for its two key growth drivers, Skyrizi and Rinvoq.
The North Chicago-based pharmaceutical company reported a strong beat for its first quarter. The performance has reinforced the company's strategy of leaning on its new treatments to build a durable revenue base following Humira's loss of patent exclusivity.
Shares rose 3.1% in the session following the April 29 announcement. The company now expects combined 2026 sales for Skyrizi and Rinvoq to exceed $31.8 billion, raising guidance for both drugs after a strong start to the year. This growth is critical as AbbVie navigates the continued revenue erosion from Humira.
In the first quarter, Skyrizi sales grew 29.2% year-over-year to $4.48 billion, while Rinvoq sales increased 20.2% to $2.12 billion. The growth was driven by strong performance across all approved indications, particularly in the inflammatory bowel disease space.
Wall Street currently has a “Moderate Buy” consensus rating on the stock. The mean price target among 32 analysts is $251.03, suggesting a 24.5% premium from current levels. Following the earnings report, Evercore ISI analyst Gavin Clark-Gartner reiterated an “Outperform” rating and increased the firm’s price target to $236. Despite the bullish analyst ratings, the stock has fallen 11.8% year-to-date, trailing the S&P 500’s 8.1% gain.
Some analyses suggest the company may be undervalued relative to its cash-generating potential. One screen based on future cash flow estimates pegged AbbVie’s fair value at $419.10, nearly double its recent price. The company faces intense competition in the immunology market from players like Johnson & Johnson (JNJ), which markets the blockbuster drugs Stelara and Tremfya.
The strong quarterly performance confirms AbbVie's strategy to pivot to its new generation of immunology drugs is working effectively. Investors will now watch for data from several potential new indications for Rinvoq, which could be approved in 2026 and early 2027 and add an estimated $2 billion in peak sales.
This article is for informational purposes only and does not constitute investment advice.
