The quarterly results for AbbVie Inc. (NYSE:ABBV) were released last week, making it a good time to revisit its performance. Revenues were US$13b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.99, an impressive 36% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AbbVie after the latest results.
Taking into account the latest results, the consensus forecast from AbbVie's 20 analysts is for revenues of US$55.7b in 2021, which would reflect a notable 11% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 160% to US$7.62. Before this earnings report, the analysts had been forecasting revenues of US$55.5b and earnings per share (EPS) of US$8.32 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$121, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic AbbVie analyst has a price target of US$144 per share, while the most pessimistic values it at US$97.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of AbbVie'shistorical trends, as the 15% annualised revenue growth to the end of 2021 is roughly in line with the 13% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 15% per year. It's clear that while AbbVie's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AbbVie. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for AbbVie going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 5 warning signs we've spotted with AbbVie .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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