AbbVie (NYSE:ABBV) posted fourth-quarter results that exceeded expectations, as usual. The company posted revenue increasing by 59.3% Y/Y. Acquiring Allergan may weight on the balance sheet, but it will pay off.
AbbVie posted revenue of $13.86 billion. EPS topped $2.92 (non-GAAP) while GAAP EPS was a penny. It forecast EPS of $6.69 - $6.89 for 2021.
Conservative investors who took advantage of buying ABBV stock in the $85 range and lower did not get much time. The stock rebounded from the $85-$95 level. The stock is stuck in a $100 - $110 range and is ready to break out. The market may want to wait for Allergan’s performance to add to results.
That will take a while. AbbVie may have a heavy debt load but it has strong cash flow. It may pay interest costs and reduce debt. As Allergan’s pipeline develops and more products come to market, revenue will offset the loss of exclusivity in its blockbuster drug Humira.
AbbVie shares pay a sizeable dividend that increases regularly. Patiently holding the stock instead of waiting for a dip is the best strategy. Timing the purchase for the lower price has a cost. Opportunities are lost when the stock jumps.
At a non-GAAP EPS forecast of up to $12.52 ($6.89 GAAP), AbbVie is a winning drug stock.
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