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AbbVie (NYSE: ABBV) is a drug company, which was spun off from Abbott in early 2013. It strives to have a remarkable impact on people's lives across several key therapeutic areas: immunology, oncology, neuroscience, eye care, virology, women's health and gastroenterology, in addition to products and services across its Allergan Aesthetics portfolio.
Why Should Investors Book Profit?
Source: REFINITIV, Analysis by Kalkine Group
Valuation Methodology (Illustrative): EV to Sales
Analysis by Kalkine group
Stock recommendation
The company continued to achieve strong results, with double-digit operational sales and EPS growth driven by a well-balanced portfolio. Despite the strong figures, the company failed to outperform on a number of key financial metrics that are critical to its long-term success. In Q3 2021, the company reported a poor liquidity profile, against an industry accompanied with longer cash cycle days. Even a higher debt profile indicates that the balance sheet is in jeopardy. Furthermore, on an NTM basis, the stock is trading at a premium to the industry on multiple parameters. Higher valuations versus an industry cast a shadow of doubt on investors' minds. In addition, technical indicators suggest that the stock price may consolidate or may make a correction from here. Hence, considering the aforesaid rationales, we have given a “Sell” recommendation in the stock at the current market price of USD 132.56 at 9:45 am Toronto Time on January 24, 2022.
One-Year Technical Price Chart (as on January 24, 2022). Source: REFINITIV, Analysis by Kalkine Group
*The reference data in this report has been partly sourced from REFINITIV.
Disclaimer
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