Market Overview

UPDATE: Citi Initiates Coverage On AbbVie, Sees Price Erosion Ahead

Share:

Citi initiated coverage on AbbVie Inc (NYSE: ABBV) Monday with a Sell rating and $48 price target.

Analyst Andrew Baum felt that the market has underestimated the “timing and magnitude” of Humira biosimilars.

According to Baum, "the critical investment debate for AbbVie is not Viekira or the oncology pipeline but rests on a single issue—the outlook for the estimated $16 billion Humira base business post the US patent expiration in 2016."

The analyst report anticipated “Humira revenues for AbbVie to decline from $16 billion at anticipated peak in 2017 to $6 billion in 2022 due to combined volume and price erosion from biosimilars starting 2018.”

Biosimilar price erosion with discounts of approximately 50 percent was expected and the firm conservatively modeled that “at year 3 biosimilars will achieve 36 percent US market share in Humira patients and 25 percent in established Humira patients.” The firm also anticipated “European price discounts to be steeper due to reference pricing on brand and progressive discounting on biosimilars.”

Baum added that “even with a novel Humira reformulation and an emergent oncology business, AbbVie's valuation still looks challenging in the absence of material value-enhancing M&A.”

The firm’s near-term estimates were inline with consensus with 2015E Q1 EPS at $0.92 and full year EPS at $4.34.

AbbVie recently traded at $55.72, down 2.08 percent.

Latest Ratings for ABBV

DateFirmActionFromTo
Sep 2019UpgradesNeutralBuy
Sep 2019UpgradesNeutralBuy
Sep 2019MaintainsOverweight

View More Analyst Ratings for ABBV
View the Latest Analyst Ratings

Posted-In: Andrew Baum CitiAnalyst Color Price Target Initiation Analyst Ratings

 

Related Articles (ABBV)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
JAZZBernsteinReinstates150.0
XGNCantor FitzgeraldInitiates Coverage On18.0
LOOPRoth CapitalInitiates Coverage On14.0
SNABairdMaintains165.0
FNDLoop CapitalMaintains46.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Morning Market Gainers

Morgan Stanley Updates Model For Athenahealth Post-Earnings