AbbVie (NYSE:ABBV) recently lowered its full-year EPS outlook by $0.15, citing an unfavorable impact from acquired IPR&D and milestone expenses on its Q2 financials. The biopharmaceutical company plans to announce its Q2 financial results before the market opens on Thursday, July 27, 2023.
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In an SEC filing, ABBV said that its second-quarter adjusted earnings would include a negative impact of $280 million (on a pre-tax basis) from acquired IPR&D and milestone expenses. This will reduce the full-year earnings by $0.15 a share.
AbbVie expects to deliver adjusted EPS in the range of $10.57 to $10.97 in 2023, down from its previous guidance of $10.72 to $11.12. As for the second quarter, ABBV expects to report EPS in the range of $2.75 to $2.85.
Q2 EPS Outlook Misses Consensus
ABBV’s second-quarter earnings missed the Street’s expectations. Analysts expected the company to deliver earnings of $2.93 per share in Q2. The EPS guidance shows a steep decline from the prior year’s earnings of $3.37 per share. The decline reflects pricing pressure and competition from biosimilars.
Wall Street expects AbbVie to report sales of $13.51 billion in Q2, compared to $14.58 billion in the prior-year quarter.
Its top line is likely to benefit from higher revenues from Skyrizi (a medicine used to treat psoriasis) and Rinvoq (a drug used to treat arthritis). Also, the momentum in aesthetics is positive. However, competition from biosimilars will likely take a toll on its revenues.
Is ABBV Stock a Buy Now?
Given the near-term competitive headwinds and pricing pressure, analysts maintain a cautiously optimistic outlook for ABBV stock.
It has received six Buy and five Hold recommendations for a Moderate Buy consensus rating. Analysts’ average price target of $169.10 implies 23.21% upside potential.
Investors should note that Vamil Divan of Guggenheim is the most accurate analyst for ABBV stock, according to TipRanks. Copying Divan’s trades on ABBV stock and holding each position for one year could result in 74% of your transactions generating a profit, with an average return of 17.94% per trade.
