Is AbbVie Inc (ABBV) overvalued?
On Equity Rank's model estimate, ABBV trades 17% above its fair value. AbbVie Inc (ABBV) last closed at $291.31; the multi-method model fair value is $249.31.
| Price | Model fair value | Price vs model |
|---|---|---|
| $291.31 | $249.31 | 17% above |
What the answer rests on
- 2 of 7 valuation methods put ABBV's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, ABBV's free cash flow would need to grow about 1.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -9.8% a year.
- ABBV trades at 50.7 times its last year's earnings, against a median of 27.2 for 14 profitable Drug Manufacturer companies.
- Over the past year the price sat below the model fair value on 16% of trading days. The gap ranged from 6% below to 146% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ABBV's fair value · What prices assume · Other companies