ABBV
AbbVie Inc.
$245.08
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 33.7% above fair value
You pay
$245.08
Bear
$157.14
Fair
$183.32
Bull
$209.51
Bear
$157.14
-35.9%
$10.08 × 12x P/E
Fair
$183.32
-25.2%
$10.08 × 14x P/E
Bull
$209.51
-14.5%
$10.08 × 16x P/E
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
24.3x
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 $281.67 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $183.32 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 288% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $193.24 (above our primary estimate by 37%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $281.67 (from 41 analysts). Our estimate is 50% 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