AbbVie to buy Capstan Therapeutics for up to $2.1 billion
Capstan develops CAR-T therapies, a type of treatment that uses a patient's own immune cells, specifically T cells, to fight diseases. Its main drug, CPTX2309, is currently in development for the treatment of autoimmune diseases.
AbbVie has been focusing on expanding its pipeline since its blockbuster arthritis drug, Humira, lost patent protection last year.
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17 hours ago
- Yahoo
Is It Worth Investing in AbbVie (ABBV) Based on Wall Street's Bullish Views?
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? Let's take a look at what these Wall Street heavyweights have to say about AbbVie (ABBV) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. AbbVie currently has an average brokerage recommendation (ABR) of 1.84, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 28 brokerage firms. An ABR of 1.84 approximates between Strong Buy and Buy. Of the 28 recommendations that derive the current ABR, 15 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 53.6% and 7.1% of all recommendations. Check price target & stock forecast for AbbVie here>>> While the ABR calls for buying AbbVie, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement. With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision. In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns. Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements. In terms of earnings estimate revisions for AbbVie, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $12.28. Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for AbbVie. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for AbbVie. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AbbVie Inc. (ABBV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
a day ago
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3 Giant Dividend Stocks to Buy to Shield Your Portfolio Now
During periods of market volatility and economic uncertainty, investors often look for refuge in dependable, dividend-paying stocks. These rare giants provide not only consistent income but also long-term stability. Dividend giants are typically well-established companies with strong cash flows, resilient business models, and a long history of rewarding shareholders, which can help safeguard your portfolio. 3 Overlooked Dividend Aristocrats To Buy in 2025 3 Giant Dividend Stocks to Buy to Shield Your Portfolio Now Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Valued at nearly $328 billion, AbbVie (ABBV) is a U.S.-based biopharmaceutical company focused on treating autoimmune disorders, cancers, neurological conditions, and aesthetic medical needs. Its strong cash flow, innovative research, and diverse portfolio of leading medicines position it as a global leader in both prescription therapeutics and aesthetics. AbbVie has a forward dividend yield of 3.5%, which is higher than the healthcare sector average of 1.58%. While the yield is appealing, a reasonable payout ratio indicates how much of its net income the company distributes as dividends while leaving enough to reinvest in the business. Its forward payout ratio of 46.9% is relatively low, indicating that dividend payments are sustainable and have room to grow. AbbVie is also a Dividend King, having paid and increased dividends for 53 straight years. AbbVie is best known for its blockbuster drug Humira, which treats autoimmune diseases such as rheumatoid arthritis, Crohn's disease, and psoriasis. However, to deal with Humira's patent expiration, the company has expanded its portfolio to include blockbuster drugs such as Skyrizi (for psoriasis and Crohn's) and Rinvoq (for rheumatoid arthritis and ulcerative colitis). In the most recent first quarter, Skyrizi's sales stood at $3.4 billion, up 70.5%, while Rinvoq's were $1.7 billion, up 57.2%. Adjusted earnings increased 6.5% in the quarter. Overall, Wall Street has assigned a 'Moderate Buy' rating to AbbVie stock. Out of 27 analysts covering the stock, 14 have a 'Strong Buy' rating, two suggest a 'Moderate Buy' rating, and 11 recommend a 'Hold' rating. The mean target price for ABBV is $208.88, which is 10% above its current levels. Its high price estimate of $250 implies potential upside of 33% over the next 12 months. AT&T (T) is a major American telecommunications company with a market capitalization of $208 billion. 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Currently, the stock is trading close to its average analyst target price of $29.21. Its high price target of $34, however, represents upside potential of 17.5% over the next 12 months. Valued at $45 billion, Target (TGT) is a major American retail company. Target is known for its low prices, trendy private-label brands, and excellent in-store and online shopping experiences. It also provides same-day delivery and curbside pickup. Target is part of the elite group of Dividend Aristocrats, a group of S&P 500 Index ($SPX) companies that have increased their dividends for at least 25 consecutive years. Target has raised its dividend annually for over 54 consecutive years as of 2025, also putting it in the even more exclusive Dividend Kings club. It recently increased its dividend by 1.8%. The company pays an attractive dividend yield of 4.4%, which is significantly higher than the consumer staples average of 1.9%. Behind every reliable dividend payer is a strong financial engine. While consumer spending can fluctuate, Target's business model enables it to adapt quickly. During a recession, consumers often migrate from premium retailers to value-oriented stores, giving Target a competitive edge. Target's adjusted earnings for the first quarter increased 11.8% to $2.27 per share. The company's payout ratio is within a sustainable range of 56.8%. This means Target has enough room to continue rewarding shareholders while reinvesting in its operations. Overall, Wall Street rates Target stock as a "Moderate Buy.' Of the 34 analysts covering the stock, eight recommend a "Strong Buy,' three say it is a 'Moderate Buy,' 21 rate it a "Hold,' and two suggest a 'Strong Sell.' Based on its average analyst target price of $110.25, the stock has upside potential of 10.9% from current levels. Plus, its high price target of $175 represents upside potential of 77.4% over the next 12 months. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
2 days ago
- Forbes
AbbVie Stock At $190: Premium Pricing For A Transformation Story
CANADA - 2025/04/03: In this photo illustration, the AbbVie logo is seen displayed on a smartphone ... More screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) AbbVie (NASDAQ:ABBV) has distinguished itself as one of the top performers in the healthcare sector this year, with its stock rising by 6% while the broader S&P 500 healthcare index fell by 1%. This outperformance is indicative of investor confidence in the pharmaceutical giant's ambitious transformation strategy as it navigates the post-Humira period. AbbVie's journey starts with recognizing the scale of its Humira challenge. Once the world's leading pharmaceutical drug (excluding the Covid-19 vaccines), Humira achieved peak sales of $21.2 billion in 2022. However, biosimilar competition has severely impacted its market share, with sales dropping 58% from its peak to $9 billion last year. This decrease signifies a substantial revenue gap that could have incapacitated many companies. Instead of yielding to this pressure, AbbVie has embarked on an aggressive acquisition strategy to enhance its portfolio and broaden its revenue sources. The company's approach has been both methodical and significant, focusing on high-growth therapeutic areas with substantial market potential. For investors seeking lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and delivered returns surpassing 91% since its inception. Additionally, see – SOFI Stock To $30? An Acquisition Spree with Strategic Intent Since the start of 2024, AbbVie has executed an impressive series of acquisitions totaling over $22 billion in deal value. The acquisitions cover various therapeutic areas, showcasing the company's dedication to diversification: This acquisition spree is indicative of more than just opportunistic dealmaking—it signifies a tactical plan to secure leadership positions in high-growth therapeutic sectors while minimizing reliance on any singular asset. AbbVie's history implies this acquisition strategy could yield remarkable returns. The firm's 2016 collaboration with Boehringer Ingelberg serves as an example of this success. For an upfront investment of $595 million, AbbVie obtained global rights to what would become Skyrizi for psoriasis and related indications. That investment has proven immensely profitable, with Skyrizi producing $11.7 billion in sales in 2024. This success story offers a blueprint for how AbbVie's current acquisitions might progress, contingent upon the company's ability to effectively integrate these assets and realize their commercial potential. Even with Humira's declining sales, AbbVie managed to achieve 4% revenue growth last year, showcasing the resilience of its broader portfolio and the preliminary advantages of its acquisition strategy. The company anticipates accelerating revenue growth to high single-digits over the next few years, with even greater earnings growth projected as margins enhance. Valuation Considerations and Market Premium Investors have responded positively to AbbVie's strategic methodology, boosting the stock to approximately $190 per share. At present, the company is trading at 18.5 times its trailing adjusted earnings of $10.27 per share. This valuation signifies a considerable premium relative to AbbVie's historical average of 14x over the past three years and most major pharmaceutical competitors. Bristol Myers Squibb, Merck, and Pfizer are trading at 10 times or less their trailing adjusted earnings, while Johnson & Johnson, Amgen, and Gilead command valuations of 14–15 times. AbbVie's premium valuation illustrates investor faith in its growth strategy and operational capabilities. This elevated multiple seems justified considering the company's robust revenue growth trajectory and ongoing pipeline expansion. As the newly acquired assets contribute to growth and margins improve, the valuation premium may prove to be sustainable or even expand further. However, we could be mistaken in our evaluation. AbbVie's aggressive acquisition strategy has incurred costs to its balance sheet stability. The company currently holds $70 billion in debt against a market capitalization of $336 billion, leading to a debt-to-equity ratio of 21.3%—moderately above the S&P 500 average of 19.4%. More concerning is the company's cash position in relation to its asset base. With only $5.2 billion in cash and equivalents out of $136 billion in total assets, AbbVie's cash-to-assets ratio is alarmingly low at 3.8%. This limited financial flexibility could limit future strategic opportunities or compel the company to rely more extensively on debt financing for future acquisitions. AbbVie's evolution from a Humira-reliant firm to a diversified pharmaceutical powerhouse represents one of the industry's most ambitious strategic shifts. For investors ready to accept balance sheet risks and a premium valuation, the company's execution history and growth potential position it as a possibly attractive long-term investment, even at current levels around $190 per share. On a connected note, are you aware that Merck might confront the same challenges AbbVie did a few years ago with Humira? Explore our insights on – Merck Stock's Ticking Keytruda Time Bomb. Now, there always remains a meaningful risk when investing in a single, or just a handful of stocks. Consider the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the past 4-year period. Why is that? Collectively, HQ Portfolio stocks delivered superior returns with lower risk compared to the benchmark index; less of a roller-coaster experience, as evidenced in HQ Portfolio performance metrics.
