Cantor Fitzgerald reiterates Overweight rating on AbbVie stock

Cantor Fitzgerald maintained its Overweight rating on AbbVie (ABBV) but revised its Q3 2025 EPS estimate downward from $2.06 to $1.82, reflecting a $1.50 per share after-tax impact from a non-tax-deductible $2.68 billion IPR&D charge and an increased tax rate. This adjustment comes amidst mixed analyst sentiment, with Erste Group downgrading AbbVie to Hold due to reduced 2025 EPS guidance, while Piper Sandler and Cantor Fitzgerald both raised price targets, citing strong commercial performance, particularly from Skyrizi. The company also reported positive Phase 2 BOTOX trial results and FDA approval for RINVOQ, indicating ongoing product development momentum.

Analysis

Cantor Fitzgerald maintained its Overweight rating on AbbVie (ABBV) but revised its Q3 2025 EPS estimate downward from $2.06 to $1.82. This adjustment primarily stems from a $1.50 per share after-tax impact related to a non-tax-deductible $2.68 billion IPR&D charge. Consequently, Cantor Fitzgerald increased its projected tax rate for the quarter to approximately 25% from 16%, correcting a prior assumption of tax shielding.

Analyst sentiment for AbbVie is currently mixed, reflecting divergent views on future earnings. While Erste Group downgraded the stock from Buy to Hold due to reduced full-year 2025 adjusted EPS guidance, both Piper Sandler and Cantor Fitzgerald raised their price targets to $284 and $250, respectively. These positive revisions were driven by strong commercial portfolio performance and Skyrizi exceeding consensus estimates, leading to an increase in AbbVie's topline guidance.

Despite the earnings estimate revision, AbbVie continues to demonstrate positive product development momentum. The company reported favorable Phase 2 trial results for BOTOX in treating upper limb essential tremor. Furthermore, the FDA approved an expanded indication for RINVOQ for ulcerative colitis and Crohn’s disease, broadening its market potential.

Key Decisions for Investors

• Investors should closely monitor AbbVie's Q3 2025 earnings call for further details on the IPR&D charge and its potential impact on future tax rates and profitability.
• Given the mixed analyst sentiment and conflicting guidance adjustments, investors should re-evaluate their valuation models, particularly concerning the long-term implications of non-deductible charges and the strength of the commercial portfolio.
• The positive clinical and regulatory developments for BOTOX and RINVOQ suggest underlying fundamental strength, warranting attention to pipeline progress as a potential offset to short-term earnings adjustments.