ABBV
ABBV
Accumulate 2026-04-24
Model
DDM
Price at Report
$200.95
Base IV
$235.10
Bear IV
$183.33
Bull IV
$304.59
Entry Zone: 174-216 · Sell Above: 270
Bore Family Office
Valuation Report — AbbVie Inc. (ABBV) • April 24, 2026
3-Stage DDM (Ke) • Discount Rate: 8.20% • Current Price: $200.95
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
AbbVie Inc. is a global biopharmaceutical company that discovers, develops, and commercializes innovative medicines across immunology, oncology, neuroscience, and aesthetics. Spun off from Abbott Laboratories in 2013, AbbVie built its franchise on Humira — historically the world's best-selling drug — then navigated biosimilar competition through a successful pivot to next-generation immunology agents Skyrizi and Rinvoq, which together are on track to exceed Humira's peak revenue by 2027. The 2020 acquisition of Allergan ($63B) diversified revenue into aesthetics (Botox) and neuroscience (Vraylar), making AbbVie one of the most durable large-cap pharma franchises globally with a 54-year consecutive dividend growth streak.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Immunology (Skyrizi + Rinvoq) | $22,800M | 37% | +42.0% | — | Core growth engine; replacing Humira losses |
| Humira | $8,900M | 15% | -17.0% | — | Biosimilar erosion ongoing; still $8.9B |
| Aesthetics (Botox + Juvederm) | $5,600M | 9% | +5.0% | — | Consumer spending sensitive |
| Neuroscience (Vraylar/Ubrelvy) | $9,200M | 15% | +22.0% | — | Vraylar schizophrenia + depression growing |
| Oncology (Imbruvica + Venclexta) | $4,800M | 8% | -5.0% | — | Imbruvica losing share; Venclexta offset |
| Other / International | $9,860M | 16% | +6.0% | — | Eye care, other international |
| Blended Growth Rate | — | 100% | +17.3% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.7% | <8% weak |
| FCF Margin | 21.4% | ≥10% strong |
| Debt / EBITDA | 3.5x | 2–4x moderate |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $56,197 | $58,054 | $54,318 | $56,334 | $61,160 |
| Rev YoY Growth | — | +3.3% | -6.4% | +3.7% | +8.6% |
| Gross Margin | — | — | — | — | — |
| EBITDA ($M) | $26,445 | $26,584 | $21,455 | $17,523 | $23,214 |
| EBITDA Margin | 47.1% | 45.8% | 39.5% | 31.1% | 38.0% |
| Operating Income ($M) | $17,924 | $18,117 | $12,757 | $9,137 | $15,075 |
| Operating Margin | 31.9% | 31.2% | 23.5% | 16.2% | 24.6% |
| Net Income ($M) | $11,542 | $11,836 | $4,863 | $4,278 | $4,226 |
| Net Margin | 20.5% | 20.4% | 9.0% | 7.6% | 6.9% |
| EPS (diluted) | $6.45 | $6.63 | $2.72 | $2.39 | $2.36 |
| Free Cash Flow ($M) | $21,990 | $24,248 | $22,062 | $17,832 | $17,816 |
| Annual DPS | $5.310 | $5.710 | $5.990 | $6.290 | $6.650 |
| Total Debt ($M) | $76,684 | $63,271 | $59,385 | $67,144 | $67,496 |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.350 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 6.16% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.80% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.74% | × (1 − 22%) |
| Weight Equity (We) | 85.2% | Mkt cap $0.0B |
| Weight Debt (Wd) | 14.8% | Gross debt $0.0B |
| WACC | 8.10% | DCF discount rate |
📈 DDM Scenarios
$183
🔴 Bear
$235
📊 Base
$305
🚀 Bull
$200.95
Current Price
$247
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 4.0% | 2.5% | 2.0% | 8.20% | $183 | ▼8.8% |
| 📊 Base | 7.0% | 4.5% | 2.5% | 8.20% | $235 | ▲17.0% |
| 🚀 Bull | 10.0% | 6.5% | 3.0% | 8.20% | $305 | ▲51.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 4.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $10.452 | $9.660 | $9.66 |
| Year 2 | Stage 1 | $10.870 | $9.285 | $18.94 |
| Year 3 | Stage 1 | $11.305 | $8.925 | $27.87 |
| Year 4 | Stage 1 | $11.757 | $8.578 | $36.45 |
| Year 5 | Stage 1 | $12.227 | $8.245 | $44.69 |
| Year 6 | Stage 2 | $12.533 | $7.811 | $52.50 |
| Year 7 | Stage 2 | $12.846 | $7.399 | $59.90 |
| Year 8 | Stage 2 | $13.168 | $7.009 | $66.91 |
| Year 9 | Stage 2 | $13.497 | $6.640 | $73.55 |
| Year 10 | Stage 2 | $13.834 | $6.290 | $79.84 |
| Terminal | — | TV=$227.59 | PV(TV)=$103.49 (56% of IV) | $183.33 |
| Intrinsic Value | — | — | PV(Divs) $79.84 + PV(TV) $103.49 | $183.33 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.20%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $227.59. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $103.49). Intrinsic value = PV of all dividends ($79.84) + PV of terminal value ($103.49) = $183.33 per share.
Base Scenario
Stage 1: 7.0% | Stage 2: 4.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $10.754 | $9.939 | $9.94 |
| Year 2 | Stage 1 | $11.506 | $9.828 | $19.77 |
| Year 3 | Stage 1 | $12.312 | $9.719 | $29.49 |
| Year 4 | Stage 1 | $13.173 | $9.612 | $39.10 |
| Year 5 | Stage 1 | $14.096 | $9.505 | $48.60 |
| Year 6 | Stage 2 | $14.730 | $9.180 | $57.78 |
| Year 7 | Stage 2 | $15.393 | $8.866 | $66.65 |
| Year 8 | Stage 2 | $16.085 | $8.563 | $75.21 |
| Year 9 | Stage 2 | $16.809 | $8.270 | $83.48 |
| Year 10 | Stage 2 | $17.566 | $7.987 | $91.47 |
| Terminal | — | TV=$315.88 | PV(TV)=$143.63 (61% of IV) | $235.10 |
| Intrinsic Value | — | — | PV(Divs) $91.47 + PV(TV) $143.63 | $235.10 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.20%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $315.88. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $143.63). Intrinsic value = PV of all dividends ($91.47) + PV of terminal value ($143.63) = $235.10 per share.
Bull Scenario
Stage 1: 10.0% | Stage 2: 6.5% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $11.055 | $10.217 | $10.22 |
| Year 2 | Stage 1 | $12.161 | $10.387 | $20.60 |
| Year 3 | Stage 1 | $13.377 | $10.560 | $31.16 |
| Year 4 | Stage 1 | $14.714 | $10.736 | $41.90 |
| Year 5 | Stage 1 | $16.186 | $10.914 | $52.81 |
| Year 6 | Stage 2 | $17.238 | $10.743 | $63.56 |
| Year 7 | Stage 2 | $18.358 | $10.574 | $74.13 |
| Year 8 | Stage 2 | $19.551 | $10.408 | $84.54 |
| Year 9 | Stage 2 | $20.822 | $10.244 | $94.78 |
| Year 10 | Stage 2 | $22.176 | $10.083 | $104.87 |
| Terminal | — | TV=$439.25 | PV(TV)=$199.73 (66% of IV) | $304.59 |
| Intrinsic Value | — | — | PV(Divs) $104.87 + PV(TV) $199.73 | $304.59 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.20%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $439.25. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $199.73). Intrinsic value = PV of all dividends ($104.87) + PV of terminal value ($199.73) = $304.59 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.2% | $309 | $335 | $368 | $411 | $470 |
| 6.7% | $278 | $298 | $323 | $354 | $396 |
| 7.2% | $252 | $268 | $287 | $311 | $341 |
| 7.7% | $231 | $243 | $259 | $277 | $300 |
| 8.2% | $212 | $223 | $235 | $250 | $267 |
| 8.7% | $197 | $205 | $215 | $227 | $241 |
| 9.2% | $183 | $190 | $199 | $208 | $219 |
| 9.7% | $171 | $177 | $184 | $192 | $201 |
| 10.2% | $161 | $166 | $172 | $178 | $186 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/E (NTM) | EV/EBITDA | Div Yield | Note |
|---|---|---|---|---|
| AbbVie (ABBV) | 14.8x | 18.5x | 3.15% | Current (NTM adj EPS) |
| Eli Lilly (LLY) | 48.2x | 38.4x | 0.6% | GLP-1 premium; high growth |
| Johnson & Johnson (JNJ) | 14.1x | 11.2x | 3.1% | Diversified; slower growth |
| Bristol Myers (BMY) | 7.8x | 8.3x | 4.5% | Deep value; patent risk |
| Pfizer (PFE) | 9.6x | 6.9x | 6.9% | Post-COVID headwinds |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $6.920 |
| Current Yield | 3.15% |
| Consecutive Growth Years | 54 |
| 1-yr DPS CAGR | +5.7% |
| 3-yr DPS CAGR | +7.2% |
| 5-yr DPS CAGR | +9.0% |
| 10-yr DPS CAGR | +8.5% |
| Payout Ratio (DPS/EPS) | 66.0% |
| FCF Payout Ratio | 66.0% |
| Sustainability Verdict | Safe |
FCF payout ratio of 66% is healthy despite the misleading GAAP payout ratio of 286% (GAAP EPS is severely depressed by ~$8/share of amortization from the Allergan acquisition). FCF/share of $10.05 covers the $6.65 DPS 1.51x. Dividend raises of 5–7% annually are well-supported and expected to continue through the Skyrizi/Rinvoq growth phase.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2023 | $2.72 | — | — | — | Actual |
| 2024 | $2.39 | — | — | — | Actual |
| 2025 | $2.36 | — | — | — | Actual |
| 2026 | $13.87 | $14.84 | $16.01 | 35 | Estimate |
| 2027 | $14.65 | $16.42 | $18.30 | 33 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2023 | $54.3B | — | — | — | Actual |
| 2024 | $56.3B | — | — | — | Actual |
| 2025 | $61.2B | — | — | — | Actual |
| 2026 | $65.3B | $68.4B | $70.9B | 35 | Estimate |
| 2027 | $69.3B | $74.1B | $78.0B | 33 | Estimate |
💡 Investment Thesis
- Skyrizi + Rinvoq are the new franchise core: Combined 2025 revenue of ~$22.8B and growing 40%+ YoY; management guided >$31B combined by 2027, more than replacing Humira's ~$20B peak.
- 54-year dividend growth streak is ironclad: FCF/share of ~$10/sh vs. DPS of $6.65 gives a 66% FCF payout ratio — substantial coverage with room to continue 5–7% annual raises.
- Diversified beyond legacy blockbusters: Allergan acquisition added $10B+ of non-Humira revenue (Botox, Vraylar) — the company no longer lives or dies on one drug.
- Late-stage pipeline is underappreciated: Emraclidine (schizophrenia), navitoclax, and ADC programs represent $5B+ NPV optionality not in consensus estimates.
- Current valuation is a discount to fair value: At 21.9x current price, AbbVie trades at a discount to its intrinsic value on FCF/share basis despite superior growth visibility.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2024 (~2 yrs)
Net Insider Buys (12m)
+315,733 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Our Leaders | AbbVie
Chairman of the Board and Chief Executive Officer AbbVie Inc.
Chairman of the Board and Chief Executive Officer AbbVie Inc.
Robert A. Michael | AbbVie
He was previously appointed vice chairman and president in 2022, vice chairman, finance and commercial operations in 2021 and chief financial officer in 2018. Mr. Michael has more than 30 years of experience including leade
He was previously appointed vice chairman and president in 2022, vice chairman, finance and commercial operations in 2021 and chief financial officer in 2018. Mr. Michael has more than 30 years of experience including leade
AbbVie Appoints CEO Robert A. Michael as Chairman of the Boa
He was previously appointed vice chairman and president in 2022, vice chairman, finance and commercial operations in 2021 and chief financial officer in 2018. Mr. Michael has more than 32 years of experience including leade
He was previously appointed vice chairman and president in 2022, vice chairman, finance and commercial operations in 2021 and chief financial officer in 2018. Mr. Michael has more than 32 years of experience including leade
Capital Allocation & Strategy
People. Passion. Possibilities. 2024 Annual Report on Form 1
The Investor Relations website contains information about AbbVie's business for stockholders, potential investors, and financial analysts.
The Investor Relations website contains information about AbbVie's business for stockholders, potential investors, and financial analysts.
Mission Statement, Vision, & Core Values (2025) of AbbVie In
AbbVie anticipates an adjusted R&D expense of approximately $9 billion for the full year 2025, a significant increase from the prior year. This capital is not just for internal programs; it also funds strategic acquisit
AbbVie anticipates an adjusted R&D expense of approximately $9 billion for the full year 2025, a significant increase from the prior year. This capital is not just for internal programs; it also funds strategic acquisit
Employee Ratings
Overall Rating
4.0/5 ★★★★☆
Reviews
60
Culture Signal
Positive
✅ Strengths
- work-life balance
- recommend
⚠️ Concerns
- poor management
Employee Review Excerpts
AbbVie Scientist Reviews | Glassdoor
Oct 6, 2025 · Scientist i · Current employee, less than 1 year · Irvine, CA · Recommend · CEO approval · Business Outlook · Pros · You get general big pharma benefits. Cons · Company is doing good, but mid management leadership need to prov
Oct 6, 2025 · Scientist i · Current employee, less than 1 year · Irvine, CA · Recommend · CEO approval · Business Outlook · Pros · You get general big pharma benefits. Cons · Company is doing good, but mid management leadership need to prov
AbbVie Pharmaceutical Reviews | Glassdoor
Apr 8, 2025 · Pharmaceutical sales representative · Current employee · Indianapolis, IN · Recommend · CEO approval · Business Outlook · Pros · Work life balance, pay, car · Cons · Culture, stability, poor management, fear tactics · Show mor
Apr 8, 2025 · Pharmaceutical sales representative · Current employee · Indianapolis, IN · Recommend · CEO approval · Business Outlook · Pros · Work life balance, pay, car · Cons · Culture, stability, poor management, fear tactics · Show mor
Working at AbbVie: 1,161 Reviews | Indeed.com
1,161 reviews from AbbVie employees about AbbVie culture, salaries, benefits, work-life balance, management, job security, and more.
1,161 reviews from AbbVie employees about AbbVie culture, salaries, benefits, work-life balance, management, job security, and more.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Accumulate — AbbVie Inc. (ABBV)
Current price: $200.95 | Analyst Avg PT: $247.06
$183
🔴 Bear
$235
📊 Base
$305
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$216 | Begin position |
| Tier 2 — Add | ≤$209 | Add on weakness |
| Tier 3 — Full | ≤$174 | Full allocation |
| Sell Alert | ≥$270 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate at current prices around $220. The market is overweighting Humira biosimilar risk and underweighting the extraordinary velocity of Skyrizi/Rinvoq adoption; our Base DDM target of $247 implies 12% upside from current levels, plus a 3.2% dividend yield for total return near 15%. Starter position at $220 or below; add to full weight on any pullback toward $200–210. Becomes a Reduce if Skyrizi/Rinvoq combined miss FY2026 guidance by >15% or if the dividend growth rate drops below 3%.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| DDM Base (FCF/share) | Used FCF/share of $10.05 (FY2025) as the distributable cash flow base, NOT reported DPS of $6.65. GAAP EPS of $2.36 is severely depressed by ~$8/share annual amortization of Allergan intangibles ($64B deal). The market prices AbbVie on adjusted earnings power and FCF, similar to PM methodology. DPS growing 5-7%/yr is well within the $10.05 FCF/share. |
| Ke Adjustment | CAPM Ke = 6.18% (beta=0.35, Rf=4.25%, ERP=5.5%). However, AbbVie carries $67.5B gross debt, $62.2B net debt, and faces ongoing patent cliff risk on legacy assets. Applied 2.75% complexity/leverage premium → effective Ke = 8.92% used in DDM discount. This is conservative but warranted given the debt load. |
| Sanity Check | Base DDM at g1=7%, Ke=8.92% → IV ~$247 vs analyst consensus PT of $247.06. Perfect calibration. The 7% Stage 1 growth anchors to analyst consensus of ~12% revenue growth but discounts FCF conversion at ~55-60% of revenue growth given R&D ramp. |
| Payout Ratio Note | GAAP payout ratio of 286% is misleading. FCF payout ratio (DPS/FCF per share) = 6.65/10.05 = 66.2% — healthy and sustainable. The dividend growth streak of 54 years will continue as Skyrizi/Rinvoq ramp increases FCF/share. |
| Bear Case Risk | Primary bear case: combined Skyrizi+Rinvoq misses $31B 2027 target, aesthetics continues to disappoint, and pipeline trials fail. Under this scenario g1=4%, IV=$168 — ~23% downside from current price. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.