ABBV
AbbVie Inc.
$216.63
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 23.2% above fair value
You pay
$216.63
Bear
$150.78
Fair
$175.89
Bull
$201.03
Bear
$150.78
-30.4%
$10.08 × 12x P/E
Fair
$175.89
-18.8%
$10.08 × 14x P/E
Bull
$201.03
-7.2%
$10.08 × 16x P/E
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
21.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $256.92 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $175.89 per share.
Warnings
The company's reported profits differ from official accounting profits by 325%. Check what costs are being left out of the adjusted number.
The company pays out 284% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $198.64 (above our primary estimate by 41%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $256.92 (from 41 analysts). Our estimate is 45% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples