At This Level, Does Buying AbbVie Inc. (ABBV) Makes Sense?

Analysts at BofA/Merrill cut their rating on shares of AbbVie Inc. (NYSE:ABBV) from Buy to Neutral in their opinion released on January 03. Analysts at SunTrust are sticking to their Buy recommendation. However, on October 22, they lifted target price for these shares to $135 from $157. Analysts at SunTrust, made their first call for the stock with a Buy rating, according to a research note that dated back to October 22.

By watching the trading activity of corporate insiders, it will become easier to get a sense of AbbVie Inc. (NYSE:ABBV)’s prospects. The earliest insider trade took place on 12/28/2018. Schumacher Laura J parted with a total of 25 thousand shares of company at average share price of $90. The total for the sales was set at $2.25 million. After this transaction, the Vice Chairman account balance stood at 134.32 thousand shares. The stock lost -1.88 percent since that insider sale. On 12/12/2018, Chase William J, EVP, Finance & Administration, sold 60 thousand shares at a price per share of $90. This removed 5.4 million shares from the insider’s fortune and the stock saw a -1.88 percent retreat in value since the news became public. This transaction left 105.36 thousand shares in the EVP, Finance & Administration account. On 12/11/2018, Chairman of the Board and CEO Gonzalez Richard A performed a sale transaction worth $1.5 million. This sale at $88.75 each has eliminated 16.85 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -0.5 percent decrease since the transaction was reported. The insider now is left with 293.82 thousand shares remaining in the account. Schumacher Laura J, who performs the Executive Vice President job, sold 94.14 thousand shares for $8.81 million. The disposal occurred on 12/04/2018 was priced at $93.58 per share. The share price plunged -5.63 percent since the reporting date. Schumacher Laura J now left with a stake of 98.26 thousand ABBV stock worth $8.68 million after the insider selling.

AbbVie Inc. (ABBV) is expected to jump by 12.42 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $135-month high price target. This represents a whopping 52.87 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $94, which represents a return potential of 6.44 percent when compared to the closing price of the stock of $88.31 on Friday, January 11. The lowest price target for the stock is $71 — slightly more than -19.6 percent from ABBV’s current share price.

The shares are currently floating around the first support level of $87.8. Below this, the next support is placed in the zone of $87.28. Till the time, the ABBV stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 49.75 on daily chart, which may remain a cause for concern. If the price breaks below $87.28 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $88.57 mark may result into a pull-back move towards $88.82 level.

ABBV shares accumulated 0.11 points or 0.12 percent on Friday to $88.31 with a light trade volume of 5.311 million shares. After opening the session at $87.54, the shares went as high as $88.31 and as low as $87.54, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $133 billion and now has 1.5 billion shares outstanding. AbbVie Inc. (ABBV) stock has gained 0.16 percent of market value in 21 trading days.

ABBV stock has a trailing 3-year beta of 1.39, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $5.08 a share in the trailing twelve months. The stock’s value has fallen -4.21 percent year to date (YTD) against a decline of -11.42 percent in 12 month’s time. The company’s shares still trade -29.83 percent away from its 1-year high of $125.86 and 13.95 percent up from 52-week low of $77.50. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of AbbVie Inc. (ABBV) are trading at a P/E ratio of 22.1 times earnings reported for the past 12 months. The industry ABBV operates in has an average P/E of 31.12. Its P/E ratio went as low as 10.21X and as high as 59.39 over the 5-year span. Further, it is sporting a 4.12 on the Price-to-Sales ratio. Compare this with the industry average P/S of 4. 76.3 percent is the gross profit margin for AbbVie Inc. and operating margin sits at 33 percent. Along with this, the net profit margin is 23.4 percent.