Yahoo Finance Earnings Beat: AbbVie Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
AbbVie Inc. (NYSE:ABBV) investors will be delighted, with the company turning in some strong numbers with its latest results. AbbVie beat earnings, with revenues hitting US$12b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 16%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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.
See our latest analysis for AbbVie
Following last week's earnings report, AbbVie's 26 analysts are forecasting 2024 revenues to be US$55.1b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 56% to US$5.23. Before this earnings report, the analysts had been forecasting revenues of US$54.6b and earnings per share (EPS) of US$5.55 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in 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$183, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on AbbVie, with the most bullish analyst valuing it at US$206 and the most bearish at US$161 per share. This is a very narrow spread of estimates, implying either that AbbVie is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that AbbVie's revenue growth is expected to slow, with the forecast 1.6% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that AbbVie is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that AbbVie's revenue is expected to perform worse than 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.
With that in mind, we wouldn't be too quick to come to a conclusion on AbbVie. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AbbVie analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 4 warning signs for AbbVie that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
