Abbvie raises Q2 EPS guidance by 2%, Morgan Stanley supports maintaining "Overweight" rating

According to the Zhitong Finance APP, Morgan Stanley recently released a research update on AbbVie Inc. (ABBV.US) for Q2 2025, showing that the company's revenue and EPS both exceeded expectations, with revenue reaching $15.423 billion (a year-on-year increase of 7%) and EPS at $2.97 (a year-on-year increase of 12%). The performance of Skyrizi and Rinvoq surpassed consensus expectations, while Humira and Juvederm underperformed. The firm expects the stock price to rise and maintains an "Overweight" rating.

AbbVie's earnings report indicates an upward adjustment of the 2025 EPS guidance to $11.88-$12.08, up from the previous guidance of $11.67-$11.87; the midpoint is $11.98, which is a 2% increase from the previous $11.77 and in line with the consensus expectation of $11.95, but 4% lower than the firm's $12.45. The firm stated that its estimates have been adjusted based on R&D expenses for the third quarter. It remains unclear whether the consensus expectations have fully incorporated this factor.

Data shows that AbbVie's Q2 revenue was $15.4 billion, 3% higher than the consensus expectation of $15 billion and in line with the firm's expectation of $15.4 billion. Operating profit was $6.8 billion, 4% higher than the consensus expectation of $6.6 billion but 2% lower than the firm's expectation of $7 billion. EPS was $2.97, 3% higher than the consensus expectation of $2.88 but 1% lower than the firm's expectation of $3.00.

Total global sales of immunology products in the second quarter amounted to $7.63 billion, exceeding both Morgan Stanley's and consensus expectations, with Skyrizi global sales of $4.4 billion (consensus expectation of $4.1 billion), Rinvoq global sales of $2 billion (in line with consensus expectations), but Humira's U.S. sales were $802 million, below the consensus expectation of $1 billion.

In terms of background, the previous guidance for Q2 2025 was revenue of approximately $15 billion, with an expected adverse impact of 0.3% from exchange rates on sales growth, while Morgan Stanley and consensus expectations were $15.4 billion/$15 billion, respectively. The adjusted EPS was $2.84-$2.88, which includes a $0.42 impact from R&D expenses, with a midpoint of $2.86, while Morgan Stanley and consensus expectations were $3.00/$2.88, respectively. It remains unclear to what extent the consensus expectations have incorporated the impact of R&D expenses.

Compared to the firm's model, there is a downside potential of $0.03 for EPS, with the specific components including: revenue -$0.01, cost of goods sold growth $0.00, selling and administrative expenses growth $0.04, R&D expenses -$0.09, other growth $0.03, tax $0.01, and share count growth $0.00. Year-on-year growth for the second quarter shows revenue growth of 7%, gross profit growth of 6%, operating profit growth of 11%, pre-tax profit growth of 9%, net profit growth of 12%, and EPS growth of 12%.

Additionally, Morgan Stanley specifically described the revenue performance of various drug products that exceeded or fell short of expectations, with the following drugs exceeding expectations: Skyrizi: USD 4.423 billion, exceeding the expected USD 4.334 billion by USD 58.9 million, an increase of 2%

Rinvoq: USD 2.028 billion, exceeding the expected USD 1.979 billion by USD 49 million, an increase of 2%

Botulinum toxin treatment field: USD 928 million, exceeding the expected USD 887 million by USD 41 million, an increase of 5%

Vraylar: USD 900 million, exceeding the expected USD 820 million by USD 80 million, an increase of 10%

Ubrelvy (acute indications): USD 338 million, exceeding the expected USD 268 million by USD 70 million, an increase of 26%

Linzess: USD 258 million, exceeding the expected USD 200 million by USD 58 million, an increase of 29%

Qulipta (atogepant, preventive indications): USD 267 million, exceeding the expected USD 226 million by USD 41 million, an increase of 18%

Mavyret: USD 375 million, exceeding the expected USD 334 million by USD 41 million, an increase of 12%

Venclexta: USD 691 million, exceeding the expected USD 670 million by USD 21 million, an increase of 3%

Creon: USD 404 million, exceeding the expected USD 372 million by USD 32 million, an increase of 9%

The following drug revenues did not meet expectations:

Ibrutinib (Imbruvica): USD 754 million, USD 22 million lower than the expected USD 776 million, a decrease of 3%

Humira: USD 1.180 billion, USD 329 million lower than the expected USD 1.509 billion, a decrease of 22%

Duodopa: USD 97 million, USD 18 million lower than the expected USD 115 million, a decrease of 16%

Botox Cosmetics: USD 692 million, USD 3 million lower than the expected USD 695 million

Juvederm (including fillers and product line extensions): USD 260 million, USD 38 million lower than the expected USD 298 million, a decrease of 13%

Lumigan 0.03%/0.01%: USD 103 million, USD 7 million lower than the expected USD 110 million, a decrease of 6%

Vyalev: USD 68 million, USD 6 million lower than the expected USD 74 million, a decrease of 8%

Other products: USD 1.498 billion, USD 110 million lower than the expected USD 1.608 billion, a decrease of 7%