AbbVie (ABBV) shares rose on Thursday after Wells Fargo analyst Mohit Bansal initiated coverage of the pharmaceutical titan at overweight on strong growth prospects.
He also named it a top pick and has a $165 share-price target.
AbbVie recently traded at $123.54, up 1%. It has climbed 15% year to date, trailing the S&P 500’s 25% gain.
While many investors and analysts are focusing on the loss of exclusivity for AbbVie’s rheumatoid arthritis drug, Humira, the “strong growth prospects” of the company’s other treatments are “not yet fully appreciated,” Bansal wrote.
“Our head-to-head analysis suggests that ABBV's ex-Humira business is bigger and growing faster than Eli Lilly (LLY) but is trading at 15 times estimated 2022 earnings.” That’s more than a 50% discount to Lilly, he said.
AbbVie has industry-leading 20% compound-annualized growth for earnings per share based on 2021-25 estimates for its non-Humira business, Bansal said.
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