AGN - Is AbbVie's Stock a Buy?
It's been a tough year for AbbVie (NYSE: ABBV) as the stock is closing 2019 not far from where it finished the year before. Question marks about the future of its business have made investors wary of investing in the company. However, given its poor performance in a year that's seen the Health Care Select SPDR Fund rise by 21% and the S&P 500 index produce returns of around 29%, AbbVie could be an underrated buy for 2020, especially given some exciting opportunities ahead.
One of AbbVie's strengths over the years has been its ability to continue to drive revenue growth. From $22.9 billion in sales in 2015 to $32.8 billion in 2018, the company's top line has risen by more than 43% in a span of just three years.
Acquisitions have played a key part of AbbVie's growth. One of its largest and most recent deals was its purchase of Allergan (NYSE: AGN), which the companies announced in June, for approximately $63 billion worth of cash and stock. Although investors didn't initially respond favorably to the deal, over the long term, AbbVie could enjoy significant benefits, the biggest of which is diversification. Although no specific date has been given, the two companies expect the deal to close "early 2020" which is when AbbVie's financials will begin including Allergan's results.