AbbVie Surges 16.6% YTD After Five Months of Price Weakness

AbbVie has seen a strong August, with 11.4% MoM gains, marking a 16.6% YTD increase. This is a significant turnaround from the 3.8% YTD increase it had seen earlier. The stock has overcome five months of price weakness and has shown positive growth.

AbbVie Inc. (ABBV) has experienced a notable turnaround in August, with a monthly gain of 11.4% and a year-to-date (YTD) increase of 16.6%. This significant performance marks a substantial improvement from the 3.8% YTD growth seen earlier in the year. The stock has successfully overcome five months of price weakness, demonstrating positive growth momentum.

The company's strong performance can be attributed to its robust second-quarter earnings report, which saw earnings per share (EPS) rise 12.1% year over year, reaching $2.97. Revenue also increased by 6.6% year over year to $15.42 billion, driven by the strong sales of key drugs like Rinvoq, Skyrizi, Venclexta, and Vraylar, as well as newer drugs such as Ubrelvy, Elahere, Epkinly, and Qulipta [1].

AbbVie's stock has outperformed the industry, sector, and the S&P 500 index. From a valuation standpoint, while the stock is not cheap, it is trading above its five-year mean of 12.68. The Zacks Consensus Estimate for 2025 earnings has been revised down slightly to $12.02 per share, while the estimate for 2026 has increased to $14.31 per share [1].

The company's success in navigating the patent cliff for its blockbuster drug Humira is a significant factor contributing to its recent growth. Despite the decline in Humira sales due to biosimilar erosion, AbbVie has successfully replaced the lost revenue with new drugs like Skyrizi and Rinvoq, which are performing exceptionally well. Sales of these drugs are expected to reach more than $25 billion in 2025 and more than $31 billion by 2027 [1].

AbbVie's growing oncology portfolio and neuroscience drugs have also contributed to its revenue growth. The company's oncology segment generated combined revenues of $3.3 billion in the first half of 2025, while sales of its neuroscience drugs increased by 20.3% to almost $5 billion [1].

The company's acquisition spree, particularly in the immunology space, has bolstered its pipeline and long-term growth prospects. AbbVie has executed more than 30 M&A transactions since the beginning of 2024, including the acquisition of Capstan Therapeutics and a licensing agreement with Gubra to develop a long-acting amylin analog for obesity [1].

Despite near-term challenges, AbbVie's strong fundamentals and robust pipeline position it well for continued growth in the years ahead. With no significant patent cliff events for the rest of the decade, the company enjoys the flexibility to invest more in research and development. Rising stock prices and estimates, along with substantial momentum heading into the second half of the year, make AbbVie a compelling investment for long-term investors.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/LLY/pressreleases/34278022/abbvie-rises-115-in-a-month-buy-hold-or-sell-the-stock/