Is AbbVie a Buy After a Recent Earnings-Driven Downturn?

AbbVie (NYSE: ABBV) has navigated a complex earnings landscape in late 2025, marked by sharp declines in GAAP earnings per share (EPS) but resilient revenue growth and optimistic guidance. For investors weighing whether to buy the stock following these results, a nuanced analysis of post-earnings fundamentals, analyst sentiment, and long-term growth drivers is essential.

Post-Earnings Fundamentals: Mixed Signals Amid Resilience

AbbVie's Q3 2025 earnings report revealed a stark contrast between GAAP and adjusted performance. GAAP diluted EPS plummeted 88.6% year-over-year to $0.10, primarily due to a $1.50 per share unfavorable impact from acquired in-process research and development (IPR&D) expenses according to the report. This one-time charge skewed short-term results but did not dampen the company's core operations. Adjusted diluted EPS, which excludes such non-recurring costs, fell 38% to $1.86, while net revenues surged 9.1% to $15.776 billion, reflecting strong demand for key products.

The stock's post-earnings reaction further complicates the narrative. Despite the GAAP EPS decline, AbbVie's shares traded at $229.70, up 23.7% from six months prior. Historical data shows the stock has averaged a 0.4% gain on the first trading day after earnings in seven of the last 12 reports, suggesting market confidence in its long-term trajectory. This resilience underscores AbbVie's ability to convert robust revenue into shareholder value, even amid accounting headwinds.

Analyst Sentiment: Optimism Anchored in Dividend Yields and Portfolio Strength

Analysts have largely maintained a bullish stance on AbbVie, particularly as it enters 2026. The company raised its 2025 adjusted diluted EPS guidance to $10.61–$10.65, up from $10.38–$10.58, signaling confidence in its ability to offset short-term costs with sustained revenue streams. This optimism is bolstered by AbbVie's strong free cash flow margin (36.6% over five years) and a 5.5% dividend increase for 2026, which reinforces its appeal to income-focused investors.

Valuation metrics also support a "Buy" rating. AbbVie trades at a discount based on discounted cash flow models and price-to-sales ratios, with analysts citing its undervaluation relative to peers. However, concerns linger about its 4.7% average constant currency revenue growth over the past two years, which trails the healthcare sector average, hinting at potential pricing pressures or soft demand in certain markets.

Long-Term Growth Drivers: Innovation and Diversification

AbbVie's long-term prospects hinge on its blockbuster immunology portfolio and expanding pipeline. Skyrizi and Rinvoq, two of its top performers, generated $4.708 billion and $2.184 billion in global net revenues, respectively, during Q3 2025. These drugs are poised for further growth as AbbVie secures regulatory approvals for new indications and expands into emerging markets.

Beyond immunology, the company is leveraging strengths in neuroscience and aesthetics. Vraylar and Qulipta, for instance, have shown consistent revenue gains, while Botox Therapeutic remains a reliable contributor according to the report. Although the oncology segment faced a slight decline in Q3, analysts anticipate a turnaround in 2026 as late-stage therapies advance.

Conclusion: A Buy for the Patient Investor

AbbVie's recent earnings downturn, driven largely by non-recurring charges, masks a fundamentally strong business. While GAAP EPS figures may deter short-term traders, the company's adjusted performance, resilient revenue growth, and robust dividend policy make it an attractive long-term holding. Analysts' upgraded ratings and confidence in its pipeline further justify a "Buy" recommendation for investors with a multi-year horizon.