Barclays Sees 22% Upside For AbbVie On Humira Opportunity

In a report published Tuesday, Barclays analyst Mark Purcell downgraded the sector view for U.S. Pharma majors from Positive to Neutral.

Despite concern over the "increasingly crowded commercial environment," the analyst sees a 22 percent upside for AbbVie ABBV. Purcell upgraded shares of AbbVie from Equal-weight to Overweight and raised the price target from $44.00 to $69.00.

Barclays highlighted that AbbVie's drug Humira, which treats different forms of arthritis, ulcerative colitis, and chronic plaque psoriasis, is key to this upgrade. Despite branded and biosimilar competitive threats, "We believe the proposed deal with SHP could further unlock value and ease the concern of over concentration on Humira through diversification."

The analyst increases Humira 2020 estimated revenues from $12.8 billion to $15 billion, versus consensus expectations of $12.3 billion.

Shares of AbbVie closed at $56.89 on Tuesday. The stock gained 1.3 percent to $57.63 in Wednesday's pre-market. Shares are up 0.54 percent from Tuesday's close shortly after Wednesday's opening bell.