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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Abbvie Inc. (XNYS:ABBV) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ABBV
Name:
ABBVIE INC. (XNYS:ABBV)
Sector:
4.75B
Industry:
Drug Manufacturers�General
CEO:
Mr. Richard Gonzalez
Total Employees:
50,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -98.33% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ABBVIE INC.(ABBV) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�GENERAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
136.28
One Month Price Target:
$136.8
Six Month Price Target :
$139.4
Likely Price in One Year's Time:
Ticker:
$142.52
Likely Trading Range Today Under (Normal Volatility)
$136.
Price Upper limit ($) :
$136.78
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$131.66
This week:
$125.95
This month :
$115.62
Other Primary facts
Market Cap:
243.27B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.77B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
8.72%
-13.%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$157.70
$147.71
$114.86
$124.85
Medium risk (<10%) entry points
Buy Call
Sell Call
$144.46
Buy Put:
Sell Put:
$142.33
$128.07
$130.23
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ABBV
Sharpe Ratio:
4.22%
Comparison:
ABBV, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 115.45% higher than the industry
& ratio is 85.26% higher than the market/S&P 500 average
Average Returns/Yield of
ABBV
Daily returns:
0.08%
Weekly returns:
0.40%
Monthly returns:
1.60%
Yearly returns:
11.30%
Comparison of returns:
Average annual returns/yield (last 3 years) is 70.27% above industry average
Classification:
ABBV, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.5
Statistical test of Returns:
ABBV has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.69%
Weekly Volatility:
3.78%
Monthly Volatility:
7.56%
Yearly Volatility:
26.18%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.99%
Volatility in last five trading days has been 17.69% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.39%
Weekly VaR:
-7.58%
Monthly VaR:
-15.16%
How Much Can the price of
ABBV
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-12%
Worst case (decline):
-52.52%
This translates to price declining to:
$119.26
This translates to price declining to:
$64.70
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ABBV is a 7.01% riskier investment compared to the market/S&P 500 & is -8.32% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -10.96% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ABBV
Beta in relation to market/S&P 500--0.68
Expected beta in 1 year's time:
0.556
Expected beta in 3 year's time:
0.787
Unlevered (debt free) Beta:
0.153
Beta in relation to Nasdaq (XNAS):
0.432
Beta in relation to all global stocks::
0.476
Beta Comparison & Analysis
Beta of competitors/peers::
0.636
Beta is 7.16% higher than peers
Average Industry Beta:
0.492
Beta is 38.55% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.29%
Sustainable growth rate is -76.84% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.114
Alpha is 138.85% above industry average alpha yield
Alpha is 728% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ABBV
Equity cost of capital:
0.078
Equity cost of capital is 19.92% above industry mean WACC
Unlevered (without debt) cost of capital:
1.75%
Before-tax cost of debt:
3.18%
After-tax cost of debt:
2.51%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.51%
WACC is 4.25% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$32.08
Revenue growth rate per share of (3Y):
14.77
Annual revenue growth rate is 89.41% above the industry average
EPS:
$6.97
Expected Annual growth rate of EPS (3Y):
6.57%
Expected future EPS growth rate is -460.32% lower than the Drug Manufacturers�General industry
Free cash flow (FCF) per share:
$12.43
Balance sheet equity growth per share: 39.05%
Equity growth rate per share is 68.61% higher than the industry
Debt per share
$35.93
EBITDA per share
$13.99
Valuation Analysis Today of
ABBV
P/E Ratio:
19.27
P/E Ratio of Competitors/Peers:
73.32
P/E ratio is -73.71% lower than main peers & is 6.57% higher than the industry
Stock price/value with industry average P/E ratio: $126.07
ABBV is 8.10% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $141.42
Present value of the expected future dividends only: $107.24
P/S (Price to Sales ratio):
4.25
Price to sales ratio is 14.36% above the industry mean
P/B (Price to book value ratio):
14.77
Price to free cash flow: 10.97
-
Net income growth rate (3Y):
70.03%
Net income growth rate is -47.24% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 20.24%
Dividend yeild: 3.98%
Previous Dividend: $1.41
Previous adjusted dividend: $1.41
Previous Dividend: $5.42
Expected next dividend best case: $1.50
Expected next dividend worst case: $1.32
Average dividend payment (long-term): $1.26
Average dividend increase/decrease (growth rate) % per period: 2.63%
Expected next dividend payment date: 15/08/2022
Expected next dividend record date: 14/07/2022
Expected next dividend declaration date: 18/05/2022
Previous dividend payment date: 16/05/2022
Previous dividend record date: 15/04/2022
Previous dividend declaration date: 17/02/2022
Dividend History:
2022-04-13--$1.41
2021-10-14--$1.30
2021-04-14--$1.30
2022-01-13--$1.41
2021-07-14--$1.30
2021-01-14--$1.30
Dividend growth rate is -65.01% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
390.11%
Net debt to equity ratio:
413.78%
Debt to assets ratio:
44.36%
Net debt to assets ratio:
47.05%
Debt-to-asset ratio is -34.86% below industry average
Ability to repay debt:
Interest coverage ratio:
10.58
Interest coverage ratio is -75.33% less than industry average
Looking forward:
Debt growth rate:
-10.89%
Annual debt growth is 1838% higher than industry average debt growth rate
Debt repayment rate in last quarter: 7.13%
Analysis of Key Statistics
Correlation of price movement with the market:
0.566
Statistical significance of correlation:
ABBV has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 9.43% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.036
Covariance of price movement with the market:
0.035
Kurtosis
8.83
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.519
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
ABBV
Gross Profit Margin Ratio:
278%
Operating Profit Margin Ratio:
32.68%
Operating profit margin is 50.52% higher than the industry
Net Profit Margin Ratio:
278%
Effective Tax Rate:
11.13%
Effective tax rate is 6.33% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
76.64%
Return on equity (ROE) is -23.65% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.71%
Return on assets (ROA) is -16.13% lower than the industry
Financial Leverage:
1.8x
Current Ratio:
0.82
Current ratio is -42.13% below industry average
Cash Conversion Cycle (days):
80.9
Cash conversion cycle is -18.53% below industry average
The remaining useful life of property plant & equipment is: 9.9 years
Stock based compensation to net income ratio:
2.45%
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates 0% more revenue than industry average revenue per employee
EBITDA generated per employee:
494.8K
Each employee generates 26% more EBITDA than industry average revenue per employee
Profit generated per employee:
249.6K
Each employee generates 13% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
94.9K
Each employee generates 37% more free cash flow than industry average revenue per employee
Assets/Capital per employee
2.3M
Each employee generates 37% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 8.04%
Growth rate in R&D investment/expenditure is -65.29% lower than the industry
Competitors/Peer firms of
ABBV
THERMO FISHER SCIENTIFIC INC. (XNYS:TMO)
ABBOTT LABORATORIES (XNYS:ABT)
Novo Nordisk A/S (XNYS:NVO)
DANAHER CORPORATION (XNYS:DHR)
MERCK & CO., INC. (XNYS:MRK)
Novartis Inc. (XNYS:NVS)
ASTRAZENECA PLC (XNAS:AZN)
PFIZER INC. (XNYS:PFE)
MEDTRONIC PUBLIC LIMITED COMPANY (XNYS:MDT)
Current Analyst Ratings
Strong buy�17%
Buy�25%
Hold�42%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
56.73B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
17.29B
39.44B
6.80B
-
12.63B
-
432.00M
19.87B
38.00M
2.34B
8.36B
24.74B
18.54B
12.48B
14.05B
1.56B
12.48B
Statement of Cash Flow
Date:
Period:
2.05B
Differed Income Tax :
- 194000.00K
Stock Based Compensation :
306.00M
Change in Working Capital :
- 1275000.00K
Accounts Receivables:
- 785000.00K
Other Working Capital:
438.00M
Other Non-Cash Items:
- 475000.00K
Net Cash Provided by Operating Activities:
4.91B
Investments in PP&E:
- 162000.00K
Net Acquisitions:
- 185000.00K
Purchases of Investments:
- 1406000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
6.10B
1.47B
7.57B
10.73B
3.48B
4.72B
26.51B
5.08B
32.30B
73.99B
260.00M
-
5.08B
116.70B
-
143.21B
-
9.95B
-
-
22.57B
32.52B
63.52B
28.02B
94.38B
-
126.90B
18.00M
5.10B
- 2984000.0K
-
March 31, 2022 at 6:00:00 AM
37.15B
16.28B
143.18B
1.73B
73.47B
67.4B
8.00M
154.00M
- 1591000.00K
- 4879000.00K
-
- 1470000.00K
- 2526000.00K
1.90B
- 6972000.00K
7.00M
- 3648000.00K
6.10B
9.75B
4.91B
- 162000.00K
4.75B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ABBV
2023
2024
2025
2026
2027
$143.23
$272.97
$285.47
$298.54
$312.21