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AbbVie (ABBV) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

AbbVie (ABBV) closed the most recent trading day at $68, moving -0.79% from the previous trading session. This change lagged the S&P 500's 0.28% gain on the day. Elsewhere, the Dow gained 0.07%, while the tech-heavy Nasdaq added 0.71%.

Coming into today, shares of the drugmaker had lost 12.51% in the past month. In that same time, the Medical sector lost 3.3%, while the S&P 500 gained 1.93%.

Investors will be hoping for strength from ABBV as it approaches its next earnings release, which is expected to be July 26, 2019. The company is expected to report EPS of $2.21, up 10.5% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.10 billion, down 2.13% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.82 per share and revenue of $32.80 billion, which would represent changes of +11.5% and +0.15%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for ABBV. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% higher. ABBV is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, ABBV currently has a Forward P/E ratio of 7.77. This represents a discount compared to its industry's average Forward P/E of 14.53.

Also, we should mention that ABBV has a PEG ratio of 1.4. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.09 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 37, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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