Last week saw the newest second-quarter earnings release from AbbVie Inc. (NYSE:ABBV), an important milestone in the company's journey to build a stronger business. Revenue of US$14b surpassed estimates by 3.1%, although statutory earnings per share missed badly, coming in 48% below expectations at US$0.77 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for AbbVie

Taking into account the latest results, AbbVie's 26 analysts currently expect revenues in 2024 to be US$55.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 71% to US$5.13. In the lead-up to this report, the analysts had been modelling revenues of US$55.7b and earnings per share (EPS) of US$5.29 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$195, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on AbbVie, with the most bullish analyst valuing it at US$215 and the most bearish at US$170 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that AbbVie's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 23% annually. Factoring in the forecast slowdown in growth, it seems obvious that AbbVie is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$195, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on AbbVie. Long-term earnings power is much more important than next year's profits. We have forecasts for AbbVie going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 5 warning signs for AbbVie that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.