ABBV Plunges 3.9% on Earnings Woes and $1.3B Charge—Is the Sell-Off Sustainable?

Summary
• AbbVie slashes 2025 EPS guidance to $9.90–$9.94 amid $1.3B IPR&D charge
• Citi and UBS maintain 'Hold' ratings, contrasting Berenberg's 'Buy'
• Intraday range of $223.12–$231.54 highlights sharp volatility

AbbVie’s stock tumbled 3.92% in a volatile session, driven by a $1.3 billion pre-tax charge and revised earnings guidance. The selloff outpaced a flat healthcare sector, with analysts split on near-term prospects. Key technical levels and options activity suggest a critical juncture for the biopharma giant.

Earnings Guidance Cut and $1.3B Charge Trigger ABBV Selloff
AbbVie’s 3.92% intraday drop stems from a $1.3 billion pre-tax charge linked to acquired in-process R&D and milestone expenses, directly impacting Q4 2025 earnings. The company now forecasts adjusted diluted EPS of $2.61–$2.65, below analyst expectations of $3.35. This follows a $2.7 billion charge in Q3 2025, signaling persistent acquisition-related costs. The revised guidance, combined with a $20B acquisition negotiation and mixed analyst ratings, triggered a sharp selloff as investors recalibrated expectations for near-term profitability.

Healthcare Sector Suffers as JNJ Drags, ABBV Lags Further
The broader healthcare sector declined 1.03%, led by Johnson & Johnson’s -1.007% drop. AbbVie’s -3.92% move far outpaced sector peers, reflecting its unique exposure to acquisition costs and earnings pressure. While JNJ’s decline stemmed from general sector weakness, ABBV’s selloff was amplified by specific guidance cuts and a $1.3B charge, highlighting divergent fundamentals within the sector.

Options Playbook: ABBV20260116P220 and ABBV20260116P222.5 Lead the Charge
• MACD: 0.37 (bullish), Signal Line: 0.24, Histogram: 0.13
• RSI: 63.66 (neutral), 200D MA: $206.35 (below price)
• Bollinger Bands: Upper $233.52, Middle $226.65, Lower $219.79
• 30D Support: $223.09–$223.36, 200D Support: $185.00–$186.49

ABBV’s technicals suggest a short-term bearish bias, with critical support at $219.79 (lower Bollinger Band) and $223.09 (30D support). The RSI hovering near 64 indicates moderate momentum, while the MACD histogram’s positive divergence hints at lingering bullish potential. However, the 200D MA remains a key long-term floor. For options traders, two contracts stand out:

• ABBV20260116P220: Put option with 34.87% IV, 37.70% leverage ratio, delta -0.3419, theta -0.1198, gamma 0.0298, turnover $98,575
- IV: High volatility suggests strong price swings
- Leverage: Amplifies gains in a bearish move
- Delta: Moderate sensitivity to price drops
- Theta: Significant time decay, ideal for short-term plays
- Gamma: High sensitivity to price movement, enhancing payoff potential
- Turnover: High liquidity ensures easy entry/exit
- Payoff: At 5% downside (ST = $213.05), payoff = max(0, $220 - $213.05) = $6.95 per share
- Why it stands out: Balances leverage and liquidity for a bearish scenario, with high gamma amplifying returns if ABBV breaks below $220.

• ABBV20260116P222.5: Put option with 36.95% IV, 53.72% leverage ratio, delta -0.4235, theta -0.1183, gamma 0.0300, turnover $170,914
- IV: Elevated volatility supports aggressive bearish bets
- Leverage: High reward potential for a 5% price drop
- Delta: Strong sensitivity to downward moves
- Theta: Moderate time decay, suitable for 1–2 week plays
- Gamma: High responsiveness to price swings, ideal for volatile environments
- Turnover: Robust liquidity ensures trade execution
- Payoff: At 5% downside (ST = $213.05), payoff = max(0, $222.5 - $213.05) = $9.45 per share
- Why it stands out: Combines high leverage and gamma for maximum payoff if ABBV collapses below $222.50, with turnover ensuring tradeability.

Aggressive bulls may consider ABBV20260116C222.5 into a bounce above $226.65.

Backtest Abbvie Stock Performance
The performance of AbbVie (ABBV) after experiencing a -4% intraday plunge from 2022 to the present has shown positive short-to-medium-term gains. The backtest data indicates that the 3-day win rate is 54.57%, the 10-day win rate is 55.65%, and the 30-day win rate is 58.48%, suggesting that the stock tends to recover and even exceed its previous levels in the immediate aftermath of such events.

ABBV Faces Crucial Support Test—Watch $219.79 Level
ABBV’s selloff reflects near-term earnings pressure from acquisition costs and revised guidance, but technicals suggest a potential rebound if $226.65 (middle Bollinger Band) holds. The 200D MA at $206.35 remains a critical long-term floor. Investors should monitor the $219.79 lower Bollinger Band and $223.09 30D support for directional clues. Meanwhile, sector leader Johnson & Johnson’s -1.007% decline underscores broader healthcare sector fragility. Watch for a breakdown below $219.79 or a regulatory update on the $20B acquisition.