High-Yield, Deep-Value AbbVie Confirms Uptrend

AbbVie Falls Into Buying Opportunity On Mixed Results 

Shares of AbbVie NYSE: ABBV fell in the wake of the Q4 results because the results were a little mixed in relation to the analyst's estimates. That dip resulted in a buy signal for the broader market, however, because mixed as they were, the results are strong, the outlook is positive, the dividend is safe, and AbbVie presents a deep value compared to the S&P 500. Trading at only 10.7X its earnings it’s half the cost of the average S&P 500 stock while yielding about 4 times as much. Better, the company is still growing despite the global headwinds and its pipeline of products promises to keep the company in the green long into the future. 

AbbVie Has Mixed Q4, Guides 2022 Higher 

AbbVie had a mixed quarter but only in terms of the estimates because growth is evident, earnings are improving, and the dividend is as safe as ever. The company reported $14.89 billion in revenue which missed the Marketbeat.com consensus by 46 basis points but grew 7.4% from last year. Last year, the company grew revenue by 59% so the 7.4% is significant while the 46 basis point margin of error is less so. Sales were underpinned by a 6% increase in Humira sales compounded by a 70% increase in Skyrizi, a 33.3% increase in Venclexta, and an 18.3% rise in Botox sales. This is offset by a 2.7% decline in Imbruvica sales that was expected. 

Moving down, margins held up well over the last year coming in at 71% GAAP to deliver better than expected bottom-line results. The adjusted $3.31 not only grew $0.39 versus last year but it also beat the consensus estimate by $0.03 despite the top-line weakness. Looking forward, the company is expecting the strength in earrings to continue and guided the market to a range above the consensus for 2022. The company is looking for earnings of $14.00 at the low end of the range compared to the $13.97 Marketbeat.com consensus estimate and we see upside risk in the numbers.

The Analysts Are Pushing AbbVie Higher 

There hasn’t been any analyst chatter since the Q4 results were released but the trend has been bullish. There have been at least 8 major sell-side firms out since the first of 2022 with price target increases that have the consensus estimate at $143.85 and it is rising. The Marketbeat.com data shows the consensus is up in the 12-month, 90, and 30-day comparisons, 6.55% in the last 30 days alone. In our view, the consensus target will continue to rise over the next 30 days at least and probably well into next year. 

The Technical Outlook: AbbVie Falls To Support And Bounces 

Shares of AbbVie fell in the wake of the Q4 results, moved lower and tested support at the short-term moving average. The test of support triggered a buy-response from the market that pushed price action back up to the previous close and then higher. The candle formed is both green and bullish, confirming support at the EMA, and indicating a continuation of the trend that has been in place since October 2021. Assuming the market follows through on this move, we see the stock moving up to a new all-time high and then extending the rally up to the $156 region.