AbbVie Inc (ABBV: NYE) stock price tumble over 5.3% on Thursday, April 4th, following a downward revision to the company’s earnings per share (EPS) outlook for both the first quarter and full year of 2024.
Key Reasons behind AbbVie’s Stock Price Drops:
Following an adjustment in its first-quarter EPS estimate from the earlier $2.26 to $2.30 range to $2.18 – $2.22, investor sentiment regarding AbbVie faltered. This $0.08 per share negative impact came in light of acquired IP&R&D expenses incurred through the ImmunoGen acquisition. AbbVie lowered its first-quarter guidance by $0.04 per share in February 2024, primarily due to the dilutive effects of the same deal.
An additional blow came as AbbVie’s full-year EPS outlook also took a hit. The forecast dropped to $10.97 – $11.17, down from the prior $11.05 – $11.25 range, as a result of a projected $0.42 per share dilutive effect also tied to the ImmunoGen acquisition.
Stock Target Advisor’s View on AbbVie’s Future:
Stock Target Advisor recommends AbbVie with a ‘Buy’ rating. Although the average analyst target price for AbbVie Inc. is $176.07 over the next 12 months, reflecting a ‘Strong Buy’ rating from 10 analysts. This opinion reasonably takes into account both encouraging and deterrent signals.
Although other stocks in the sector, such as Eli Lilly and Company (LLY), Johnson & Johnson (JNJ), Merck & Company Inc (MRK), and Novartis AG ADR (NVS), sport significant achievements, AbbVie remains a viable choice for many investors.
Conclusion:
AbbVie’s decision to trim its EPS outlook shook the markets, but it’s crucial for investors to remember that these revisions are part and parcel of dynamic business operations, particularly in the highly competitive pharma industry.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
