AbbVie Rises 11.5% in a Month: Buy, Hold or Sell the Stock?

AbbVie (ABBV) reported a strong second quarter, exceeding earnings and revenue estimates and subsequently raising its 2025 guidance, contributing to an 11.5% stock increase over the past month. This performance is largely attributed to the successful launch and rapid uptake of its immunology drugs, Skyrizi and Rinvoq, which are effectively offsetting the decline in Humira sales and are projected to generate over $25 billion in combined sales by 2025. The company is further bolstering growth through its expanding oncology and neuroscience portfolios, alongside strategic acquisitions, and is positioned for sustained mid-to-high single-digit revenue growth through 2029 due to a lack of major patent expirations this decade.

Analysis

AbbVie has demonstrated a successful transition beyond the patent expiration of its former blockbuster, Humira, driven by a strong second-quarter performance that beat analyst estimates and led to a raised full-year guidance for 2025. The company reported a 6.6% year-over-year revenue increase to $15.42 billion and raised its adjusted EPS guidance to a range of $11.88-$12.08. This growth is primarily fueled by its ex-Humira platform, which saw sales increase by over 22%, led by the immunology drugs Skyrizi and Rinvoq. These two assets generated a combined $11.6 billion in the first half of 2025 and are projected to achieve over $31 billion in sales by 2027, effectively replacing lost Humira revenue, which declined by over 50% in the first half. Growth is further diversified by a 20.3% sales increase in the neuroscience portfolio and a 4.2% rise in oncology. However, the company faces headwinds from a 22.2% decline in Juvederm sales due to macroeconomic pressures. AbbVie's aggressive M&A strategy, including a strategic entry into the obesity market, coupled with no major loss of exclusivity events this decade, positions it for a projected high single-digit revenue CAGR through 2029, though its current forward P/E of 15.31x trades above its five-year average.

Key Decisions for Investors

• Investors should recognize that AbbVie has successfully navigated its largest patent cliff, with the robust growth of its ex-Humira platform, led by Skyrizi and Rinvoq, supporting a long-term growth outlook through 2029.
• It is crucial to monitor the aesthetics portfolio, as the 22.2% decline in Juvederm sales represents a significant headwind, and also track the pace of Humira's continued sales erosion from biosimilar competition.
• Given the stock's 19.3% year-to-date gain and a valuation premium to its historical average, consider the current price relative to the strong fundamental outlook and monitor for catalysts from its M&A-driven pipeline, particularly in oncology and the newly entered obesity space.