ABBV

Executive Summary

Humira Cliff Cleared — A Dividend King Compounding on Skyrizi + Rinvoq

AbbVie (ABBV) trades at $217.72, mid-range of its $182-$244 52-week band, as the long-feared Humira patent cliff fades into the rear-view mirror. Q1 2026 delivered net revenue of $15.0B, +12.4% YoY and adjusted EPS of $2.65 (+7.7%), beating consensus. The growth engine is now Skyrizi at $4.5B (+29% op.) and Rinvoq at $2.1B (+20% op.), together a >$26B annualized run-rate that more than offsets Humira's $688M, down 40% on biosimilars. Management raised FY2026 adjusted EPS guidance to $14.08-$14.28 and lifted Skyrizi/Rinvoq forecasts to $21.6B/$10.2B. The dividend story is the anchor: $6.92/share (~3.1% yield), 53 consecutive years of increases (Dividend King via Abbott heritage), covered 1.53x by $17.8B FY25 free cash flow. At ~14x forward earnings with a 0.91 PEG, valuation is undemanding for double-digit immunology growth. Street consensus is Buy (21 Buy / 9 Hold / 1 Sell) with a median target near $250 (~+15% upside).

Fundamentals

Q1 2026 Snapshot — Revenue +12.4% YoY as Skyrizi clears $4.5B in a single quarter, the ex-Humira platform now grows double digits, and 1.53x FCF/dividend coverage anchors a 53-year payout streak.

Revenue (Q1'26)

$15.0B

+12.4% YoY · beat by ~$300M

Adj. EPS (Q1'26)

$2.65

+7.7% YoY · beat guidance mid

Skyrizi Revenue

$4.5B

+29% op. · FY26e $21.6B

Rinvoq Revenue

$2.1B

+20% op. · FY26e $10.2B

Humira Revenue

$688M

-40% op. · cliff largely absorbed

Dividend / Yield

$6.92

~3.1% yield · 53-yr increase streak

FCF Coverage

1.53x

$17.8B FY25 FCF vs $11.7B div

Forward P/E

14x

PEG 0.91 · undemanding

Quarterly Revenue Trend

$15.4B

Q2'25

$15.7B

Q3'25

$15.3B

Q4'25

$15.0B

Q1'26

Growth Engine

Skyrizi + Rinvoq Are a >$30B Franchise Eclipsing the Humira Decline

+29%

Skyrizi Op. Growth

$4.5B Q1'26 · FY26e raised to $21.6B

+20%

Rinvoq Op. Growth

$2.1B Q1'26 · FY26e raised to $10.2B

>20%

Skyrizi+Rinvoq FY26e

Combined growth offsetting Humira erosion

2023

Humira US Biosimilar Entry

Humira loses US exclusivity; AbbVie pivots to its 'next-gen' immunology pair Skyrizi and Rinvoq plus M&A (ImmunoGen, Cerevel) to bridge the cliff.

Feb 2026

Q4 2025 + FY25 + Dividend Hike

FY25 revenue grows past the trough; FCF ~$17.8B covers the dividend 1.53x. Board raises the dividend 5.5% — the 53rd consecutive annual increase.

Apr 29, 2026

Q1 2026: Rev $15.0B (+12.4%)

Adj. EPS $2.65 beats; Skyrizi $4.5B, Rinvoq $2.1B, Humira $688M (-40%). FY26 adj. EPS guidance raised to $14.08-$14.28.

2026

Pipeline Catalysts

Skyrizi SC induction in Crohn's, Rinvoq in alopecia areata & vitiligo, tavapadon (Parkinson's, ex-Cerevel), trenibotE aesthetics, and Epkinly/pivekimab oncology in regulatory review.

May 2026

Analyst Posture

Consensus stays Buy (21 Buy / 9 Hold / 1 Sell); median target ~$250, average ~$256 — valuation seen as reasonable at ~14x forward earnings, 0.91 PEG.

Earnings & Signals

Forward Estimates, Surprises & Insider Activity

Forward Earnings Estimates

FY+1 EPS Consensus$14.18 (FY2026e, mid-guide)

FY+2 EPS Consensus$15.60 (FY2027e)

PEG Ratio0.91

Forward P/E14x

EPS Revisions (90d)↑12 ↓3 (Net upward — estimates revised higher after the Q1'26 beat and the raised Skyrizi/Rinvoq forecasts.)

Guidance AccuracyStrong — management has consistently met or beaten its adjusted-EPS framework and raised FY26 guidance to $14.08-$14.28 after the Q1 beat.

Earnings Surprise Track Record

Q2'25 Est: $3.39 Act: $3.40 +0.3%

Q3'25 Est: $3.34 Act: $3.40 +1.8%

Q4'25 Est: $2.42 Act: $2.48 +2.5%

Q1'26 Est: $2.60 Act: $2.65 +1.9%

Beat RateBeat on adjusted EPS in 4 of last 4 quarters

Insider Activity (90 Days)

Net Buying/SellingNet selling (modest)

Sell/Buy RatioSell-tilted (routine 10b5-1)

Neutral

Insider activity is dominated by routine, pre-scheduled 10b5-1 dispositions against a negligible ~0.16% aggregate insider stake. Flows are mechanical and immaterial to the thesis; capital allocation is governed by board policy emphasizing the dividend.

Peer Comparison

Relative Valuation vs. Competitors

Company	Fwd P/E	Div Yield	Rev Growth	PEG
AbbVie	14x	3.1%	+12%	0.91
Eli Lilly	34x	0.7%	+32%	1.1
Merck	22x	2.8%	+7%	1.5
Johnson & Johnson	27x	2.3%	+5%	2.9
Pfizer	19x	6.3%	+2%	n/a

ABBV is the value-plus-growth standout in large pharma: ~14x forward earnings and a 0.91 PEG, well below LLY (~34x), JNJ (~27x), MRK (~22x) and even deep-value PFE (~19x), yet it grows double digits — faster than every peer except LLY. Its ~3.1% yield trails only PFE's stretched 6.3% (which exceeds FCF at ~0.93x coverage), while ABBV's 1.53x FCF coverage makes its lower headline yield far more durable.

Valuation

Price Targets & Scenarios

Scenario	Price Target	Assumptions	Probability
Bull Case	$290	Skyrizi/Rinvoq sustain >20% growth past 2027 and beat the ~$31B 2025 framework; pipeline launches (tavapadon, Crohn's SC, vitiligo, aesthetics) add optionality; multiple re-rates toward 16-17x as the Humira overhang fully clears.	30%
Base Case	$250	FY26 adj. EPS lands in the $14.08-$14.28 guide, immunology grows double digits, Humira stabilizes, and the dividend compounds mid-single digits. Multiple holds near ~14-15x forward; total return led by EPS growth plus the ~3% yield.	50%
Bear Case	$190	Skyrizi/Rinvoq growth decelerates faster than modeled, US drug-pricing (IRA/MFN) pressure bites, a pipeline setback or dilutive M&A weighs, and the multiple compresses toward 12x amid sector de-rating.	20%

Probability-Weighted Target: $250 (+15% from current price)

$250

Weighted

Bull $29030%

Base $25050%

Bear $19020%

Analyst Consensus

Street Median

$250

Buy / Consensus

Street Average

$256

Buy / Bullish

Morgan Stanley

$253

Overweight

Street High

$290

Buy / Top of Range

Buy consensus across ~31 analysts (21 Buy / 9 Hold / 1 Sell). Median 12-month target ~$250 and average ~$256 imply roughly +15% upside from $217.72. The lone Sell reflects long-dated growth-durability and drug-pricing concerns, not near-term fundamentals.

Technical

Key Levels & Options Intelligence

S/RSupport & Resistance

52-Week High

$244.38

Resistance

$219.60

200-Day MA

$218.79

Current Price

$217.72

Support

$211.33

50-Day MA

$209.75

52-Week Low

$181.80

OptOptions & Sentiment

Implied Volatility (30D): ~22% (subdued)
IV Percentile: ~35% (below median)
Put/Call Ratio (OI): 0.78 · call-tilted
RSI (14): ~60 · neutral
Beta: ~0.60 · defensive
Trend vs 200-DMA: At/just below — consolidating
Dividend Capture: Ex-div mid-quarter · $1.73/qtr
Options Volume Trend: Muted post-Q1 beat

Risk & Ownership

Risk Assessment & Insider Signals

!Risk Factors

Skyrizi/Rinvoq concentration & growth durability: The two immunology assets now drive the bulk of growth and offset Humira; any deceleration, biosimilar timing surprise, or label/safety setback for JAK-class Rinvoq would hit both the EPS trajectory and the dividend-growth runway.
US drug pricing — IRA / MFN policy: Medicare negotiation, inflation rebates and 'most-favored-nation' pricing pressure create multi-year headwinds to net pricing on key products, capping the durability of double-digit growth.
Elevated leverage and GAAP payout optics: Allergan/Cerevel/ImmunoGen debt and intangible amortization depress GAAP earnings (GAAP payout ratio screens >200%); the dividend is covered on a cash/adjusted basis, but the optics and balance-sheet load constrain capital flexibility.
Pipeline / late-stage trial risk: Tavapadon (Parkinson's), Crohn's SC induction, vitiligo, aesthetics (trenibotE) and oncology assets are key optionality; a high-profile Phase 3 miss or CRL would dent the long-duration thesis.
Dilutive M&A to refill the pipeline: AbbVie has repeatedly acquired growth (ImmunoGen, Cerevel); a large, richly priced deal could add debt and integration risk while pressuring near-term EPS and the buyback.
Multiple compression in defensive pharma: A rotation out of low-beta dividend payers or a broad healthcare de-rating could compress ABBV's ~14x multiple even with intact fundamentals, given its income-oriented holder base.

OOwnership & Insider Signals

Institutional ownership ~75%: Roughly 75% of shares are held by institutions, with retail at ~25% and insiders ~0.16% — a deep, income-oriented blue-chip holder base typical of a Dividend King.
Vanguard is the top holder (~10%): Vanguard Group owns ~180.8M shares (~10.2%), the single largest position; passive index complexes (Vanguard, BlackRock, State Street) anchor the register alongside active dividend and value managers.
Income / dividend-fund concentration: ABBV is a core holding across dividend-growth and equity-income funds and ETFs given its 53-year increase streak, reinforcing demand for the shares as a yield-and-growth hybrid.
Negligible insider stake: Insider ownership is just ~0.16% of shares; governance and capital allocation are effectively driven by the board and large institutional holders rather than founder/insider control.
Defensive, low-beta profile: With a beta near 0.6 and a reliable payout, the shares attract risk-averse and retirement capital, dampening volatility but leaving the stock sensitive to rate-driven rotation out of bond-proxy equities.
Steady share count via buybacks: Free cash flow funds the dividend (1.53x covered) with capacity left for opportunistic buybacks and debt paydown, supporting per-share metrics even amid M&A.