Abbvie Inc.

ABBV

Pharmaceutical Preparations

Mkt Cap

$243.9B

PE

37.69

Debt

$60.74B

Cash

$13.29B

EV

$291.3B

FCF

$24.73B

Market Cap

$243.9B

P/E Ratio

37.69

Debt

$60.74B

Cash

$13.29B

EV

$291.3B

FCF

$24.73B

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers Humira, a therapy administered as an injection for autoimmune, intestinal Behçet's diseases, and pyoderma gangrenosum; Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease; Rinvoq, a JAK inhibitor to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, and ulcerative colitis; Imbruvica for the treatment of adult patients with blood cancers; and Venclexta/Venclyxto to treat hematological malignancies. It also provides facial injectables, plastics and regenerative medicine, body contouring, and skincare products; Vraylar for depressive disorder; Duopa and Duodopa to treat advanced Parkinson's disease; and Ubrelvy for the acute treatment of migraine with or without aura in adults; Qulipta for episodic migraine. In addition, the company offers Lumigan/Ganfort and Alphagan/Combigan for the reduction of elevated intraocular pressure(IOP) in patients with open angle glaucoma (OAG) or ocular hypertension; Restasis, a calcineurin inhibitor immunosuppressant indicated to increase tear production; and eye care products. Further, it provides Mavyret/Maviret to treat chronic hepatitis C virus (HCV) genotype 1-6 infection and HCV genotype 1 infection; Creon, a pancreatic enzyme therapy; Lupron to treat advanced prostate cancer, endometriosis and central precocious puberty, and patients with anemia caused by uterine fibroids; Linzess/Constella to treat irritable bowel syndrome with constipation and chronic idiopathic constipation; and Synthroid for hypothyroidism. It has collaborations with Calico Life Sciences LLC; REGENXBIO Inc.; I-Mab Biopharma; Genmab A/S; Janssen Biotech, Inc.; and Genentech, Inc. The company was incorporated in 2012 and is headquartered in North Chicago, Illinois.

Sector

10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
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3/31/22
10-K
12/31/21
10-Q
9/30/21
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6/30/21
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3/31/21
10-K
12/31/20
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9/30/20
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6/30/20
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3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Abbvie Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$24.73B	$30.72B	$37.5B	$44.97B	$52.98B	$61.29B	$69.58B	$77.52B	$84.7B	$90.75B	$95.28B	$952.8B
DCF		$26.71B	$28.35B	$29.57B	$30.29B	$30.47B	$30.08B	$29.14B	$27.69B	$25.8B	$23.55B	$235.5B
Value	$517.2B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 14%

Earnings Stability 50%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2014	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	TTM
Net Margin	8.9%	23%	23%	19%	17%	24%	9.9%	20%	20%	12%
ROA	12%	14%	14%	14%	11%	15%	7.5%	12%	13%	11%
ROE	100%	130%	130%	100%	-67%	-96%	35%	74%	68%	53%

What is the average Net Margin?

The average Net Margin over the past 5 years is +18.37%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.1%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +12%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.17%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +19.66%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +10.77%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2014	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	TTM
Debt FCF	4.97	4.46	5.61	3.92	3.03	5.56	5.56	4.02	2.77	2.46
Debt Equity	8.37	7.93	7.94	7.25	-4.58	-8.69	7.13	5.73	3.89	5.01
MIN
Graham Stability	-	-	100%	100%	100%	100%	73%	100%	100%	73%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.46.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.08.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.73.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2015	12-2017	12-2019	12-2021	Trend
Revenue	14%	16%	20%	3.3%	0.92%
Net Income	13%	17%	15%	2.7%	0.99%
Stockholders Equity	24%	28%	-	12%	-0.31%
FCF	19%	21%	24%	10%	-0.88%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +15.52%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.92%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +17.4%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +0.99%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +27.67%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.31%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +20.79%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -0.88%.