Market Overview

Citi Bullish On AbbVie As Allergan Deal Provides An Earnings Floor

Citi Bullish On AbbVie As Allergan Deal Provides An Earnings Floor

AbbVie Inc (NYSE: ABBV) shares are advancing to their highest level since early July following a positive analyst action on the stock.

The Analyst

Citigroup analyst Andrew Baum upgraded shares of AbbVie from Neutral to Buy with a $90 price target, suggesting roughly 25% upside from current levels.

The Thesis

AbbVie will extract significant shareholder value from its proposed Allergan plc (NYSE: AGN) acquisition, given its "industry-leading commercial focus and patient/physician centricity," analyst Baum said.

Even within AbbVie's portfolio, the analyst said he thinks the market is underappreciating the commercial potential of both plaque psoriasis drug Skyrizi and rheumatoid arthritis drug Rinvoq.

The analyst said he expected optimal PBM access, given the sizeable Humira rebate and the company's managed market excellence.

Dispelling Citi's earlier fears over the anticipated impact of biosimilars, the Allergan transaction provides a reasonably secure earnings floor and dividend on which the multiple can expand, the firm said.

The valuation is likely to improve, as Phase 3 readouts and revenue from new drugs kick in, it added.

The Price Action

At last check, AbbVie shares were advancing 2.30% to $73.78.

Related Links
The Daily Biotech Pulse: Enanta Aces Midstage NASH Study, Takeda's Ulcerative Colitis Drug Found Superior To AbbVie's, Decision Day For J&J

Biotech Stock On The Radar: Anavex, A Neurology-Focused Precision Medicine Company

Latest Ratings for ABBV

Nov 2019MaintainsBuy
Nov 2019MaintainsBuy
Sep 2019UpgradesNeutralBuy

View More Analyst Ratings for ABBV
View the Latest Analyst Ratings

Posted-In: Andrew Baum CitigroupAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (AGN + ABBV)

View Comments and Join the Discussion!

Latest Ratings

TGTMorgan StanleyMaintains130.0
VCMorgan StanleyMaintains52.0
URBNMorgan StanleyMaintains32.0
TENMorgan StanleyMaintains8.0
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

Cramer: Disney, Salesforce 'Were Wrong' For Not Buying Twitter

WeedMD Wraps $13.12-Million Bought-Deal Offering