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AbbVie Q4 Preview: What's in Store?

It’s that time of the year – earnings season.

Earnings season is undoubtedly the most critical period for stocks as companies finally unveil what’s transpired behind closed doors.

So far, we’ve received a surplus of quarterly results, including those from technology titans Apple AAPL, Alphabet GOOGL, and Microsoft MSFT.

Now, a big-time player in the Zacks Medical sector, AbbVie ABBV, is slated to unveil its quarterly results on Thursday, February 9th, before market open.

AbbVie enjoys leadership positions in key therapeutic areas, including immunology, hematologic oncology, neuroscience, aesthetics, eye care, and women’s health.

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How does the company currently stack up? We can use quarterly results from a few peers, Eli Lilly LLY and Merck & Co. MRK, as a small gauge. Let’s take a closer look.

Eli Lilly Q4

Eli Lilly’s Q4 results were released on February 2nd. LLY reported earnings of $2.09 per share, handily surpassing the $1.83 Zacks Consensus EPS Estimate by roughly 14%.

Quarterly revenue totaled $7.3 billion, marginally falling short of expectations and decreasing nearly 9% from year-ago quarterly sales of $8 billion. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

In addition, the company’s revenue generated from its COVID-19 antibodies took a sizable hit as the pandemic slowly fades, reported at $38 million and falling 96% year-over-year.

Several large-cap pharmaceutical companies benefitted significantly from their COVID-19 treatments and products, and now we’re seeing this trend reverse.

Merck & Co. Q4

Merck posted better-than-expected results, exceeding the Zacks Consensus EPS Estimate by roughly 4% and reporting earnings of $1.62 per share.

The company generated approximately $13.8 billion in sales, again exceeding our consensus sales estimate modestly and growing 2.2% year-over-year.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

In addition, the company provided guidance for FY23; Merck now expects worldwide sales of $57.2 billion – $58.7 billion and full-year GAAP EPS in a range of $5.86 per share – $6.01 per share.

AbbVie

Quarterly Estimates –

Analysts have been bearish in their earnings outlooks, with four negative earnings estimate revisions hitting the tape over the last several months. Still, the Zacks Consensus EPS Estimate of $3.54 suggests an improvement of nearly 7% year-over-year.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company’s top line is also estimated to expand, with our consensus sales estimate of $15.4 billion indicating an uptick of 3% from year-ago quarterly sales of $14.9 billion.

Quarterly Performance –

The company has put in a mixed earnings performance, exceeding bottom line estimates in five consecutive quarters but falling short of sales expectations in each instance.

In AbbVie’s latest print, the company delivered a 3% EPS surprise and reported sales roughly 0.8% below expectations.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Valuation –

ABBV shares currently trade at a 12.4X forward earnings multiple, above the 9.5X five-year median by a fair margin and nearly in line with 2022 highs.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Further, ABBV’s forward price-to-sales works out to be 4.8X, again above the 3.7X five-year median and the Zacks Medical sector average.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

ABBV carries a Style Score of “B” for Value.

Putting Everything Together

As the critically-important earnings season continues to roll on, investors have been met with quarterly results that have helped keep the market afloat. Needless to say, the so-called earnings apocalypse has yet to materialize.

Next week, AbbVie ABBV is slated to unveil its quarterly results on Thursday, February 9th, before market open. We’ve already received quarterly results from a few peers, including Eli Lilly LLY and Merck & Co. MRK.

Analysts have lowered their earnings outlooks for AbbVie’s quarter to be reported, with estimates indicating Y/Y increases in earnings and revenue.

In addition, the company’s forward price-to-sales and forward earnings multiple reside well above their respective five-year medians.

Heading into the release, AbbVie is currently a Zacks Rank #3 (Hold).

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Apple Inc. (AAPL) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

AbbVie Inc. (ABBV) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

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