Back to Main

Will AbbVie (ABBV) Disappoint This Earnings Season? - Analyst Blog

Posted: 4/24/2014 6:30:00 PM
Referenced Stocks: ABBV;ACT;FRX;TEVA

AbbVie Inc. ( ABBV ) is scheduled to report first quarter 2014 results before the opening bell on Apr 25. Last quarter, AbbVie had posted an earnings surprise of -1.20%. Let's see how things are shaping up for this announcement.

Factors at Play

Although Humira will continue to boost revenues, AbbVie's top-line will remain under pressure with the loss of exclusivity of TriCor, TriLipix and Niaspan. Unfavorable currency movement is also expected to impact the top line. We also remain concerned about AbbVie's dependence on Humira due to intense competition in the market.

Meanwhile, other products like Synthroid, Creon, Zemplar and Duodopa should continue to perform well and partially offset the impact of genericization.

Earnings Whispers?

Our proven model does not conclusively show that AbbVie is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for AbbVie is -1.47% since the Most Accurate estimate is $0.67 while the Zacks Consensus Estimate is $0.68.

Zacks #3 Rank (Hold): AbbVie's Zacks Rank #3 (Hold) has little effect on the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3.

Actavis plc ( ACT ) has an Earnings ESP of +3.34% and holds a Zacks Rank #2 (Buy). Actavis will report first quarter earnings on Apr 30.

Teva Pharmaceutical Industries Ltd. ( TEVA ) has an Earnings ESP of +0.00% and holds a Zacks Rank #2. Teva will report first quarter earnings on May 1.

Forest Laboratories Inc. ( FRX ) has an Earnings ESP of +4.55% and holds a Zacks Rank #3. Forest Labs will report first quarter earnings on Apr 29.

ABBVIE INC (ABBV): Free Stock Analysis Report

ACTAVIS PLC (ACT): Free Stock Analysis Report

FOREST LABS A (FRX): Free Stock Analysis Report

TEVA PHARM ADR (TEVA): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research