Stock Analysis & Valuation AbbVie Inc. (0QCV.L)

• Previous Close: £220.50
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	96.80	-56
Intrinsic value (DCF)	83.74	-62
Graham-Dodd Method		n/a
Graham Formula	21.40	-90

Strategic Investment Analysis

Company Overview

AbbVie Inc. is a leading global biopharmaceutical company specializing in the discovery, development, and commercialization of innovative therapies across multiple therapeutic areas. Headquartered in North Chicago, Illinois, AbbVie operates worldwide, offering a diverse portfolio of treatments for autoimmune diseases, oncology, neuroscience, eye care, and virology. Key products include HUMIRA, a blockbuster therapy for autoimmune diseases, SKYRIZI for plaque psoriasis, RINVOQ for rheumatoid arthritis, and IMBRUVICA for hematologic malignancies. AbbVie also markets Botox therapeutic, MAVYRET for hepatitis C, and a range of eye care products like Restasis. The company has a strong R&D pipeline and strategic collaborations, such as its partnership with Dragonfly Therapeutics, to drive future growth. With a market capitalization exceeding $221 billion, AbbVie is a dominant player in the pharmaceutical industry, leveraging its expertise in biologics and small molecules to address unmet medical needs.

Investment Summary

AbbVie presents a compelling investment case due to its diversified product portfolio, strong cash flow generation, and robust dividend yield (currently $6.38 per share). The company's revenue of $54.3 billion in 2023 underscores its market leadership, though net income of $4.8 billion reflects significant expenses, including R&D and debt servicing (total debt stands at $60.4 billion). While HUMIRA faces biosimilar competition, newer drugs like SKYRIZI and RINVOQ show strong growth potential. AbbVie's low beta (0.551) suggests relative stability compared to the broader market. However, investors should monitor pipeline developments, patent expirations, and regulatory risks. The company's strong operating cash flow ($22.8 billion) supports continued investment in innovation and shareholder returns.

Competitive Analysis

AbbVie competes in the global pharmaceutical market with a focus on high-margin specialty drugs. Its competitive advantage lies in its strong biologics platform (notably HUMIRA, the world's top-selling drug for years) and expanding immunology portfolio (SKYRIZI, RINVOQ). The company has successfully managed the HUMIRA biosimilar transition while growing newer franchises. In oncology, IMBRUVICA and VENCLEXTA maintain leadership in hematologic cancers. AbbVie's neuroscience franchise (including Botox therapeutic) and eye care business provide additional diversification. The company's R&D productivity and business development acumen (e.g., Allergan acquisition) differentiate it from peers. However, reliance on a few key products remains a risk, and the company faces intense competition in immunology from Janssen (TREMFYA, STELARA) and in oncology from AstraZeneca and Merck. AbbVie's scale and global commercial infrastructure are strengths, but pricing pressures and reimbursement challenges persist across the industry.

Major Competitors

• Johnson & Johnson (JNJ): Johnson & Johnson is a diversified healthcare giant with strong pharmaceuticals (STELARA, DARZALEX), medical devices, and consumer health segments. Its pharmaceutical business competes directly with AbbVie in immunology and oncology. J&J's larger scale and more balanced business mix provide stability, but it may lack AbbVie's focus on high-growth specialty drugs. J&J's R&D productivity and financial resources make it a formidable competitor.
• Pfizer Inc. (PFE): Pfizer is a pharmaceutical leader with strengths in vaccines (Comirnaty), oncology (Ibrance), and inflammation (Xeljanz). While larger than AbbVie in revenue, Pfizer has faced recent revenue declines post-COVID and lacks AbbVie's concentration in high-growth immunology. Pfizer's broader primary care focus contrasts with AbbVie's specialty drug strategy. Pfizer's strong cash position enables business development.
• Bristol-Myers Squibb (BMY): Bristol-Myers Squibb is a key competitor in oncology (Opdivo, Yervoy) and cardiovascular drugs (Eliquis). BMY's strength in immuno-oncology competes with AbbVie's hematology franchise. While BMY has a robust pipeline, it faces patent expirations similar to AbbVie. BMY lacks AbbVie's immunology presence but has a more focused therapeutic footprint.
• Novo Nordisk (NVO): Novo Nordisk is the global leader in diabetes care (Ozempic, Wegovy) and is expanding into obesity and other chronic diseases. While not a direct competitor in immunology, Novo's GLP-1 franchise competes for healthcare dollars. Novo's superior growth profile and limited patent cliffs contrast with AbbVie's more diversified but maturing portfolio.
• Amgen (AMGN): Amgen competes with AbbVie in inflammation (Enbrel), oncology, and biosimilars (including HUMIRA biosimilars). Amgen's strong biologics capabilities and pipeline in cardiometabolic diseases differentiate it. While smaller than AbbVie, Amgen's focus on innovative biologics and cost structure make it a nimble competitor. Amgen's biosimilar portfolio directly pressures AbbVie's legacy products.
• Eli Lilly (LLY): Eli Lilly is a fast-growing competitor in diabetes (Trulicity, Mounjaro), immunology (Taltz), and neuroscience. Lilly's strong recent launch momentum and pipeline (e.g., donanemab for Alzheimer's) give it a growth edge over AbbVie. Lilly's focused therapeutic strategy and R&D productivity make it a key innovator, though it lacks AbbVie's product diversification.
• Roche (ROG.SW): Roche is a global pharmaceutical leader with strengths in oncology (Herceptin, Tecentriq), immunology (Actemra), and diagnostics. Roche's integrated diagnostics business provides a unique advantage. While Roche's portfolio is broader, it competes directly with AbbVie in hematology and autoimmune diseases. Roche's R&D spending and geographic reach make it a formidable global competitor.