AbbVie (ABBVABBVAbbVie Inc.$285.64+0.16% Valuation Verdict Significantly Overvalued ) is entering earnings week near its highs, with its earnings to be reported soon. The stock closed at $285.64 on October 23, ~2% below its 52-week high of $291.40 and up ~28% year to date. The run despite the management’s lowering of its EPS guide in July. So the market has already come to the conclusion that AbbVie has put the Humira cliff behind it.
AbbVie’s Q3 2026 earnings are due on Friday, October 30 before the open, with the call at 9:00 a.m. ET. My take: A small beat is not enough for the stock at this price that is ~20x the 2026 EPS guide. This quarter’s uncertainty is the ability for Skyrizi and Rinvoq to continue to expand in the 20s, as the slower parts of the portfolio (aesthetics and oncology) do not drag it down.
A key figure is ABBV’s share price compared to the 52-week range. One of the key figures is the share price of ABBV over the course of the past 12 months when compared with the 52-week range.
The Q2 numbers have been good and the guide moved for a deal not the business
AbbVie’s net revenue in Q2 2026 increased by 10.2% YoY to $16.99 billion (9.5% operational, excluding currency changes). Adjusted EPS rose 22.9% to $3.65. The stock still slipped by ~2.5% post print.
The engine is a good candidate to be identified. Skyrizi grew 24.4% to $5.51 billion and Rinvoq grew 24.5% to $2.53 billion. Together these are $8.03 billion or ~47% of all company revenue from the two drugs. Neuroscience grew 20.3% to $3.23 billion, led by Vraylar (+18.9%) and Qulipta (+30.9%).
The vulnerabilities were as obvious:
- Humira fell 35.9% to $756 million, with U.S. sales down 47%.
- Oncology was down 1.5% with Imbruvica down 29.4%. The “IRA pricing and competitive share pressure” (and the IRA is the Inflation Reduction Act, which is the name given to the bill allowing Medicare to be able to negotiate drug prices) is the fault, says CCO Jeff Stewart.
- Aesthetics was unchanged at $1.28 billion (down 0.9% operationally). Juvederm fell 6.0%.
The adjusted operating margin was 48.3%.
Clearly, the guide change must be accompanied by a context. AbbVie cut its 2026 adjusted EPS range to $13.87–$14.07 from $13.91–$14.11. The $0.04 reduction was due to $0.14 in dilution from the Apogee acquisition, which was partially offset by $0.10 in improvements in performance in the current business. The core business guide was lifted, that is, the main activity was oriented upwards.
The guidance management put in place for Q3
During the Q2 call CFO Scott Reents provided guidance for Q3 of:
- Revenue: ~$17.2 billion (fx headwind ~0.4%).
- Adjusted EPS: $3.84-$3.88, which includes a partial quarter of Apogee dilution.
He guided for full-year 2026:
- Revenue: ~$67.6 billion, up $300 million.
- Skyrizi: $21.7 billion, up $100 million.
- Neuroscience: $12.7 billion, an increase of $100 million.
- Adjusted operating margin: approaching 47%.
Q3 revenue of $17.2 billion would be up ~9% y/y from Q3 2025’s $15.78 billion, but only ~1% above Q2. The Q2 10-Q shows H1 revenue of $31.99 billion. That means the full-year guidance implies ~$35.6 billion in H2, or ~$18.4 billion of Q4 if Q3 is on guide. Now that’s a huge leap forward for the last 3 months and I want to see it with some real life momentum.
Moreover, don’t take too much from the y/y EPS growth. That’s primarily due to $1.50 of acquired IPR&D (in-process R&D, upfront payments for pipeline deals that AbbVie includes in adjusted EPS) that dialed back Q3 2025 adjusted EPS to $1.86. The base (excluding that hit) is ~$3.36. So, this will create an illusion of ~100% plus in the headline, when really it’s about 15% growth.
Revenue figures for quarterly results in the figure below are from AbbVie 8-K earnings releases for Q3, 2025 – Q2, 2026.
What I am going to watch on 30th Oct.
Skyrizi’s growth and Rinvoq’s growth. The total sales of the two combined in Q3 2025 were $6.89 billion. Growth in the low-to-mid 20s would put Q3 2026 around $8.4–$8.6 billion. The comparisons are getting tougher, which really hurt the growth of Skyrizi as it dropped from 46.8% a year ago to 24% in Q2. It would hurt the story if growth dropped into the teens. It would be supported by being held in the 20s.
Aesthetics. AbbVie might come up with the biggest shocks in either direction. Management cited “continued headwinds in key dermal filler markets” and did not provide any time frame for recovery. What we’ve seen is Botox Cosmetic growing and Juvederm shrinking. Any indication of Juvederm getting good would be new data.
Advance of neuroscience – $12.7 billion. Annualized $3.23 billion is just above the target with Q2. Vraylar and Botox Therapeutic are guided to approach ~$4.1 billion and ~$4.2 billion, respectively, and I will check that both are on pace.
IPR&D below the line. The EPS guide does not include any of the acquired IPR&D and milestones post Q2. If any business development payments are made in Q3, then these would be in addition to the guide. That’s why I’m more interested in how they are doing as a business, rather than the number of times that they meet the EPS target.
What’s new since the previous report?
Apogee deal closed, using debt capital. AbbVie finished the $10.9 billion Apogee acquisition on 3 September, which added zumilokibart, a long-acting interleukin-13 (IL-13) antibody for atopic dermatitis (eczema). Management expects ~$0.14 of dilution in 2026, ~$0.46 in 2027, and accretion only beginning in 2032. To help fund the deal, AbbVie had previously issued $10 billion of senior notes on Aug. 18, that mature between 2028 and 2066. At June 30, just before this issue, total debt was $70.8 billion. Management reported on the call that they are looking for a net leverage (debt minus cash-to-EBITDA) of 2x in 2 to 3 years after closing.
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Juvmo is approved. The FDA approved Juvmo (tavapadon) for Parkinson’s disease on Sept. 28 and it will be available in the U.S. in October. Management has already said that the ramp on the early side will be small as Medicare coverage will not be immediate. It will not affect or move Q3, but launching commentary is important for 2027.
Crohn’s patients can now start Skyrizi at home. On October 23, the FDA approved a subcutaneous induction regimen, so patients can start treatment by injection at home instead of with IV infusions. If full paid access, Stewart proposed, takes 60-90 days, it suggests a sales impact would be primarily in 2027. Management had previously stated that acceleration will start to appear in early 2027.
Lutikizumab achieved its target – just barely. The Phase 3 INTREPID trial was performed in the chronic inflammatory skin disease, hidradenitis suppurativa, and met its primary endpoint. The difference was compared to placebo, and 31.4% responded compared to 23.4%, an 8-point difference. The gap is below Phase 3 benchmarks, William Blair said, and it won’t be filed until H2 2027. It’s not my view of it as a growth driver; it’s a minor option.
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