Here's Why AbbVie (ABBV) Stock is Advancing Today
NEW YORK (TheStreet) -- AbbVie (ABBV) - Get Report shares are soaring 5.21% to $62.65 on Monday after the bio-pharmaceutical company had its rating and price target boosted at Morgan Stanley.
The firm upgraded the company to "overweight" from "equal weight" and raised its price target to $73 from $62.
"Management's robust defense of the broad Humira patent estate, including putting a stake in the ground for the strength of 2020 patents, combined with our own patent consultant's views, give us conviction to raise our projections," analysts said.
On top of this bullish outlook, the firm noted that AbbVie is the cheapest large-cap pharma with superior long-term prospects.
However, one risk is Humira durability concerns, analysts added.
Based in North Chicago, IL, AbbVie discovers, develops, manufactures, and sells pharmaceutical products worldwide.
Separately, 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 revenue growth, increase in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ABBV's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 11.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Biotechnology industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $1,098.00 million to $1,366.00 million.
- ABBVIE INC has improved earnings per share by 22.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ABBVIE INC reported lower earnings of $1.09 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($4.24 versus $1.09).
- ABBV has underperformed the S&P 500 Index, declining 9.81% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The debt-to-equity ratio is very high at 5.65 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, ABBV's quick ratio is somewhat strong at 1.12, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: ABBV