Abbvie Selloff exaggerated, stocks remain undervalued: BMO

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AbbVie’s (ABBV) – Get the report from AbbVie, Inc. The sale was overstated after a September 1 setback for its flagship immunology drug Rinvoq, and the stock remains undervalued, according to BMO analyst Gary Nachman.

It has an outperformance rating and a price target of $ 133. The stock recently traded at $ 106.61, down 0.81%, and has fallen 12% since Aug.31.

On September 1, the Food and Drug Administration mandated new cardiac and cancer safety warnings for Rinvoq and the JAK inhibitor class of drugs from other companies.

“Doctors agreed that Rinvoq is still likely to be approved for atopic dermatitis (AD), given its overall risk / benefit ratio,” Nachman said. “Even with limited use, this could still be a solid opportunity. “

Thus, “our sensitivity analysis to Rinvoq’s already conservative forecast suggests that the sale has been exaggerated,” he said.

Looking at the company as a whole, “ABBV is well positioned to successfully manage Humira’s loss of exclusivity in the United States from January 2023, with sufficiently cautious investors and reasonably low expectations,” Nachman said. .

“ABBV is performing very well with its main growth drivers, particularly the strong trends Skyrizi and Rinvoq. Its acquisition of Allergan in May 2020 significantly reduced its focus in Humira.

Morningstar analyst Damien Conover wasn’t overly concerned with the FDA news either. This puts “moderate pressure” on Rinvoq, who is estimated to have 6% of AbbVie’s sales in 2023, he said. But that doesn’t affect its fair value estimate of $ 108 for the stock or its narrow moat rating.

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