The AbbVie Inc (NYSE: ABBV) stock price has risen 10.4% from its February lows but is still down 2.23% for the year after falling heavily in January. The recent rally in AbbVie stock has left many wondering whether there could be more gains in future.
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However, the company’s fundamentals indicate that while its shares could rally up to their 2022 high of $176, it may be difficult for the company to guarantee higher prices for investors. The firm’s leading moneymaker Humira is about to witness a severe decline in sales as its patent protections expire and generic drugs flood the market.
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AbbVie has taken steps to replace the income that will be lost from the drop in Humira sales by launching two new drugs within the same segment, which are Skyrizi and Rinvoq. The company expects sales of the new drugs to pick up by 2025 and surpass Humira sales in 2027.
The pharmaceutical company is also working on expanding sales of its aesthetic products, including its rights to Botox and Juvederm, which are growing in popularity as more people embrace such products to erase signs of ageing.
The beauty industry is growing in leaps and bounds. Although AbbVie is a pharmaceutical giant, its Botox and Juvederm sales are expected to increase from 2022’s $5 billion to $9 billion in 2029.
Therefore, AbbVie’s management team expects to grow its annual revenues by 7% to 9% by the decade's end. The growth will benefit investors, but the company will likely face challenges over the next few years as generic drugs cannibalise Humira sales.
The company’s management team expects its revenues to decline in 2023 and 2024 due to the above reasons before returning to growth in 2025 and beyond. However, while the next two years may not be promising, AbbVie’s dividend payout of $1.48 is decent.
The company has grown its dividend payout by 270% since splitting from Abbott in 2013. AbbVie also has a drug pipeline of over 50 treatments that could generate significant revenues.
*This is not investment advice.
AbbVie stock price.
The AbbVie stock price is down 2.23% for the year after rallying 10.39% from its February low of $143.56 to its current price of $158.48.
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