NEW YORK (TheStreet) -- AbbVie (ABBV) shares are up 2.54% to $67.78 in morning trading on Wednesday after analysts at JPMorgan resumed coverage on the company with an "overweight" rating and $75 price target.
The price target represents a potential 10.6% upside from the stock's current price.
The firm praised the company's $21 billion acquisition of Pharmacyclics (PCYC) which closed yesterday, raising their earnings growth expectations to 9% annually through 2020.
Analysts praised the company's arthritis treatment Humira, the world's highest selling drug, but noted the diversification of cash flows that will occur thanks to the integration of Pharmacyclics' lukemia treatment Imbruvica.
"We see Imbruvica rapidly becoming a standard of care in several hematology tumors and are forecasting ABBV's reported sales to increase to $4bn by 2020 driven primarily through uptake of existing indications," said analysts.
"In addition, we could see several billion dollars of upside to our long-term estimates for Imbruvica based on expanded use in DLBCL and FL. More broadly, we see ABBV with a leading hematology oncology franchise based on Imbruvica as well as venetoclax (bcl-2) and duvelisib (PI3K) and expect this portfolio to generate $5.2bn in 2020 sales (17% of total ABBV sales)," the firm said.
In separate news today, the company announced that it is accelerating its share buybacks following the acquisition of Pharmacyclics, repurchasing $5 billion in shares from Morgan Stanley (MS).
In March the company doubled its share repurchase authorization to $10 billion from $5 billion.
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, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- You can view the full analysis from the report here: ABBV Ratings Report