AbbVie Rises on Revised Profit Outlook, Navigates Tariff Uncertainties

AbbVie (ABBV) has bolstered its 2025 earnings forecast, reflecting robust growth in its immunology portfolio, even as it navigates uncertainties tied to potential pharmaceutical tariffs. The company’s first-quarter results, driven by blockbuster drugs Skyrizi and Rinvoq, exceeded expectations, but its cautious stance on trade policy shifts underscores the delicate balance between optimism and risk management in today’s volatile markets.

Strong Q1 Performance Fuels Revisions

AbbVie’s Q1 2025 adjusted EPS of $2.46, a 6.5% year-over-year increase, exceeded the consensus estimate of $2.38, leading to an upward revision of its full-year 2025 guidance. The new EPS range of $12.09 to $12.29 tops the prior projection of $11.99 to $12.19 and surpasses the consensus of $12.17. This revision highlights the company’s reliance on its immunology drugs, which grew at a blistering pace: Skyrizi sales jumped 70.5% to $3.425 billion, while Rinvoq rose 57.2% to $1.72 billion. Combined, these therapies now account for nearly half of AbbVie’s total revenue.

Tariff Threats: A Shadow Over the Outlook

Despite the positive news, AbbVie’s guidance explicitly excludes the impact of potential pharmaceutical tariffs, a risk that has loomed over the industry amid ongoing trade disputes. In its earnings release, the company stated: “This guidance… does not reflect any trade policy shifts, including pharmaceutical sector tariffs, that could impact AbbVie’s business.” Analysts at William Blair echoed these concerns, warning that tariffs on key brands could introduce “significant uncertainty” for pricing and margins.

The U.S. government has periodically floated the idea of imposing tariffs on imported pharmaceuticals, a move that could disproportionately affect companies like AbbVie, which sources ingredients and manufactures drugs globally. While the company has not yet faced such tariffs, its decision to exclude them from its forecasts signals a prudent acknowledgment of the risk—a contrast to some peers that have downplayed such threats entirely.

Growth Outlook and Market Reaction

The company’s long-term ambitions are undeterred. AbbVie now projects Skyrizi and Rinvoq sales to exceed $31 billion combined by 2027, a $4 billion upward revision from prior estimates. CEO Robert Michael emphasized the company’s focus on its “high-growth immunology and aesthetics platforms,” even as the aesthetics division—a key growth area—saw a 11.7% sales decline in Q1 to $1.102 billion, likely due to macroeconomic pressures on elective procedures.

Investors responded favorably to the news, pushing AbbVie’s stock up 1.13% to $182.41 in after-hours trading. The stock’s year-to-date performance has outpaced the broader market, reflecting confidence in its strategic pivot away from its once-blockbuster Humira, which saw sales plummet 50.6% to $1.12 billion amid biosimilar competition.

Conclusion: A Tale of Two Drivers

AbbVie’s revised guidance underscores its success in transitioning its revenue base from Humira to newer therapies, a strategic shift that has positioned it as a leader in immunology. The company’s high single-digit revenue growth targets through 2029—bolstered by Skyrizi’s dominance in psoriasis and Rinvoq’s expanding indications—suggests sustainable momentum. However, the tariff risk remains a wildcard.

Should trade tensions escalate, the impact could be material. For instance, a 5% tariff on imported pharmaceuticals could shave $1.5 billion off AbbVie’s projected 2027 sales, based on current growth trajectories. Yet, the company’s decision to exclude such risks from its forecasts also reflects its confidence in its ability to mitigate them through pricing adjustments, supply chain flexibility, or policy advocacy.

In the near term, AbbVie’s fundamentals—strong cash flows, a diversified pipeline, and a dividend yield of 2.3%—make it a resilient play in a volatile healthcare sector. Investors, however, must weigh its growth story against the ever-present threat of regulatory and trade headwinds. For now, the market is betting on AbbVie’s ability to navigate both.