Abbvie Is One Of The Most 'Dislocated Names' In Pharma

Goldman Sachs’ Jami Rubin believes AbbVie Inc (NYSE: ABBV) is one of the most “dislocated names” in the pharmaceutical space, with its below peer valuation not reflective of the company’s above industry growth outlook and broad pipeline.

Rubin maintained a Buy rating on the company, with a $78 price target.

Attractive Valuation

“We like the near term setup for ABBV in the 2H given its attractive valuation and superior growth profile driven by execution on earnings and broad pipeline that will serve as positive catalysts till the end of the year,” the analyst mentioned.

Although AbbVie’s shares have appreciated 9 percent year-to-date, driven partly by its continued beats and raised and the post-Brexit environment for pharma, Rubin believes the name is still out of favor with many investors, partly due to the Humira overhang.

Positive Steps

“In our view, we note that ABBV has taken positive strategic steps in diversifying away from Humira and transforming itself into a company focused on immunology and oncology by investing behind a rich pipeline,” the analyst stated.

Although the Humira biosimilar risk is still an overhang on the stock, Rubin believes this asset has greater potential than investors expect, given that there is potential that no biosimilars reach the market till 2021/2022.

“For the rest of the year, we expect the focus to be on strong earnings and new product launches including Imbruvica, Venclexta, Zinbryta as well as strong execution on the pipeline,” the analyst added.

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