TheStreet

AbbVie (ABBV - Get Report) shares rose in Thursday trading after the drugmaker's stock was upgraded to buy from neutral at UBS. Analyst Navin Jacob also lowered the price target to $79 from $85.

The $79 price target implies 14% upside to the stock's closing price on Wednesday of $69.49. The stock was trading up 1.8% at $70.74 at last check.

"We upgrade AbbVie to buy because its acquisition of Allergan (AGN - Get Report) leads to a Newco generating $20 billion-plus of annual free cash flow growing to a highly compelling, 9% free cash flow yield in '23E (year of Humira's U.S. patent expiry)," Jacob wrote in a Sept. 12 note.

"Post '23 we estimate stable cash flows driven by ABBV's five key growth assets and Allergan Aesthetics franchise. Newco cash flows are immediately tangible via a sustainable and growing dividend, currently yielding highly attractive more than 6%, which even at our $79 price target yields more than 5%."

AbbVie shares are moving away from their 52-week low of $62.66 reached in mid-August. The stock hit an all-time high above $123 in early 2018.