ABBV - AbbVie: A Hold Again (Rating Downgrade)
2024-07-03 04:38:40 ET
Summary
- AbbVie reported first quarter results and although results were not great, the company managed to set off declining Humira sales.
- Especially, Skyrizi and Rinvoq are expected to keep growing at a high pace and AbbVie made a few major acquisitions that will also contribute to growth.
- However, debt levels increased again following the acquisitions.
- We could make the argument that AbbVie is slightly undervalued, but I would be cautious and rate the stock rather as a "Hold".
It has almost been one year since I covered AbbVie Inc. ( ABBV ) last. In my last article , I was rather bullish about AbbVie and called the stock a “Buy” despite declining Humira sales. In my conclusion, I wrote:
AbbVie: A Hold Again (Rating Downgrade)AbbVie is not only a "Buy" due to the lower stock price, but the company remains a recession-resilient pick and I still expect the global economy to enter a recession in the coming quarters. The dividend yield of 4.3% is also tempting in my opinion and the company is still able to generate an impressive free cash flow - even if free cash flow might be lower in the coming quarters due to the patent loss of Humira.