AbbVie Inc.

AbbVie Inc. (NYSE: ABBV) is a worldwide, research-driven biopharmaceutical company with a diversified business model. It focuses on the research, development, manufacturing, and commercialization of medicines and therapies, with a portfolio spanning Immunology, Oncology, Aesthetics, Neuroscience, Eye Care, and other key therapeutic areas.

As per previous Kalkine’s The Shariah Compliance Report published on ‘ABBV’ on August 01, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 193.61 based on fundamental analysis and the stock price has now moved up by ~ 14.00% since then and has breached resistance level 1.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale – Sell at USD 220.72

• Decline in GAAP Earnings: AbbVie reported a steep decline in its GAAP diluted EPS, which fell 32.5% year-over-year to USD 0.52. This significant drop was largely influenced by unfavorable impacts from acquired IPR&D and milestone expenses, which reduced EPS by USD 0.42 per share. Despite solid adjusted earnings, the reliance on adjustments highlights pressure on the company’s profitability under GAAP standards, reflecting higher costs related to pipeline investments and acquisitions.
• Humira’s Rapid Revenue Erosion: Humira, once AbbVie’s flagship product, experienced a dramatic revenue decline of 58.1% on a reported basis, with sales dropping to USD 1.18 billion. This erosion underscores the ongoing competitive pressure from biosimilars, particularly in the U.S. market. The steep decline continues to weigh heavily on AbbVie’s overall portfolio, forcing the company to rely more on newer therapies like Skyrizi and Rinvoq to offset losses.
• Weakness in Aesthetics Portfolio: AbbVie’s aesthetics segment underperformed during the quarter, with global revenues falling 8.1% to USD 1.279 billion. Botox Cosmetic revenues declined 5%, while Juvederm suffered a sharper 24% drop. This underperformance points to ongoing challenges in consumer demand, likely tied to macroeconomic pressures and competitive dynamics in the aesthetics market, raising concerns about growth stability in this segment.
• Pressure from High Expenses and Tax Rate: The company’s cost structure reflected additional strain, with acquired IPR&D and milestone expenses consuming 5.3% of net revenues. Furthermore, AbbVie’s GAAP tax rate spiked to 39.4%, compared to the adjusted rate of 16.2%. These factors significantly compressed GAAP profitability, and while adjusted metrics smooth out the impact, they highlight continued exposure to high R&D spending, milestone commitments, and an uneven tax burden that could challenge net income growth.

Valuation (Using Price/Earnings Value Multiple)

Share Price Chart  

Conclusion

AbbVie’s second-quarter results revealed several headwinds despite overall revenue growth. GAAP diluted EPS plunged 32.5% due to heavy IPR&D and milestone expenses, highlighting profitability pressures. The company continues to face steep erosion in Humira sales, which fell 58% as biosimilar competition intensifies. Additionally, the aesthetics portfolio underperformed, with revenues down 8%, led by a sharp 24% decline in Juvederm. Elevated costs and a high GAAP tax rate of 39.4% further weighed on earnings, underscoring concerns about AbbVie’s reliance on newer drugs to offset mounting pressures in legacy products and consumer-driven segments.

Based on the notional gains, valuation downside and price action stance, a "Sell" recommendation on AbbVie Inc. (NYSE: ABBV) has been given at the current market price of USD 220.72 as on 17 September 2025 at 9:25 am PDT.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 17 September 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.