One Factor Driving AbbVie (ABBV) Stock Down Today

NEW YORK (TheStreet) -- Shares of AbbVie Inc. (ABBV) are down 1.66% to $61.67 after the company was downgraded to "market perform" to "outperform" at BMO Capital Markets earlier on Friday.

The firm decreased the price target to $65 from $61 for the research-based biopharmaceutical company.

BMO said it lowered the company's ratings because the stock price reflects high expectations on Hep-C opportunity.

"We believe Hep-C is the most important driver for ABBV in 2015, and we think expectations may now be too high," said BMO analyst Alex Arfaei.

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, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that net income has been generally deteriorating over time."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, ABBV's share price has jumped by 30.98%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • ABBVIE INC's earnings per share declined by 48.3% 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 increased its bottom line by earning $2.56 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus $2.56).
  • The gross profit margin for ABBVIE INC is currently very high, coming in at 78.28%. Regardless of ABBV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ABBV's net profit margin of 10.08% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 47.5% when compared to the same quarter one year ago, falling from $964.00 million to $506.00 million.
  • You can view the full analysis from the report here: ABBV Ratings Report

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