Should Value Investors Buy AbbVie (ABBV) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is AbbVie (ABBV). ABBV is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.65, which compares to its industry's average of 15.15. Over the last 12 months, ABBV's Forward P/E has been as high as 10.29 and as low as 5.96, with a median of 8.21.
Investors will also notice that ABBV has a PEG ratio of 1.95. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ABBV's PEG compares to its industry's average PEG of 2.02. Within the past year, ABBV's PEG has been as high as 2.44 and as low as 1.26, with a median of 1.77.
Finally, our model also underscores that ABBV has a P/CF ratio of 13.82. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.31. Over the past 52 weeks, ABBV's P/CF has been as high as 25.71 and as low as 9.68, with a median of 14.11.
These are only a few of the key metrics included in AbbVie's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ABBV looks like an impressive value stock at the moment.
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