NEW YORK (TheStreet) -- Shares of AbbVie Inc. (ABBV - Get Report) are lower by -1.62% to $56.47 as the pharmaceuticals company makes its fourth offer to buy Shire Plc (SHPG - Get Report), raising the price to about 30.1 billion pounds, or $51.5 billion, in an effort to bring Shire to the negotiating table, Bloomberg reports.
AbbVie increased the offer by about 11% to 51.15 pounds per share in cash and stock, the company said today.
TheStreet Ratings team rates ABBVIE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ABBVIE INC (ABBV) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to other companies in the Pharmaceuticals industry and the overall market, ABBVIE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 5.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ABBVIE INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ABBVIE INC increased its bottom line by earning $2.56 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $2.56).
- The debt-to-equity ratio is very high at 3.07 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, ABBV has managed to keep a strong quick ratio of 2.20, which demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has decreased to $624.00 million or 47.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: ABBV Ratings Report