ABBV Stock Dips 4% Despite Robust Q2: Buy the Dip or Stay Cautious?

The company reduced its 2026 EPS outlook to $13.87-$14.07 from the prior range of $13.91-$14.11. AbbVie clarified that the APGE deal would reduce adjusted EPS by approximately 14 cents in 2026, which would be largely offset by 10 cents of improved performance. The company also raised its full-year revenue guidance by $300 million from $67.3 billion to $67.6 billion. However, investors generally react negatively whenever earnings guidance moves lower.

The stock’s downward movement despite a robust Q2 performance has confused investors about whether to buy, sell or hold the stock. Investors should make a decision based on the company’s fundamentals after carefully analyzing its strengths and weaknesses. Let’s delve deeper.

ABBV’s Successful Immunology Drugs — Skyrizi and Rinvoq

Sales of Humira are declining due to loss of exclusivity (LOE) and biosimilar erosion. However, AbbVie has successfully navigated the LOE of Humira, a drug that once generated more than 50% of its total revenues. It has accomplished this by launching two other successful immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications, and should support top-line growth in the next few years.

In 2026, AbbVie expects combined Skyrizi and Rinvoq sales of more than $31 billion. It recorded $14.6 billion in sales in the first half. Combined, Skyrizi and Rinvoq are expected to deliver more than 20% growth in 2026. Management is particularly positive on Skyrizi and Rinvoq’s competitive positioning in IBD indications.

Strong immunology market growth, market share gains and momentum from new indications are expected to drive these drugs’ growth. Rinvoq was approved for two indications — vitiligo and alopecia areata — in the EU in July 2026, while applications are under review in the United States. In addition, phase III data for Rinvoq in hidradenitis suppurativa are expected in 2026. AbbVie now expects Rinvoq to generate peak sales of more than $2 billion from alopecia areata and vitiligo alone, compared with its earlier forecast of over $2 billion across all expansion indications, including hidradenitis suppurativa.

However, AbbVie expects a low single-digit pricing headwind for both Skyrizi and Rinvoq in 2026 and over the next few years. Moreover, the launch of J&J’s (JNJ) new oral pill for moderate-to-severe plaque psoriasis, Icotyde, has increased competitive pressure for Skyrizi, which can impact the product’s prescription trends. However, AbbVie, on the second quarter conference call, said that it has not seen any material change in Skyrizi’s momentum since launch of Icotyde by J&J and seems confident that it can navigate competition from Icotyde.

ABBV’s Neuroscience Drugs Contributing to Growth

AbbVie’s neuroscience portfolio is also contributing to top-line growth, driven by higher sales of Botox Therapeutic, depression drug Vraylar, newer migraine drugs Ubrelvy and Qulipta, and new Parkinson’s disease drug, Vyalev. Sales from its neuroscience portfolio rose 19.8% to $3.23 billion in the second quarter. AbbVie’s new oral CGRPs, Ubrelvy and Qulipta/Aquipta, represent a combined $5 billion-plus peak sales opportunity.

The launch of Vyalev, a transformative therapy for treating advanced Parkinson’s disease, approved in late 2024, has been encouraging, with first-half 2026 sales reaching $457 million. AbbVie expects the therapy to achieve blockbuster status in 2026 as U.S. uptake accelerates following full coverage. With once-daily oral candidate tavapadon (under review in the United States; FDA decision expected in the third quarter of 2026) and Duopa, AbbVie believes its Parkinson's disease franchise has peak annual sales potential of more than $5 billion and will be a key neuroscience growth driver.

AbbVie’s Robust Pipeline & M&A Spree

AbbVie boasts a robust pipeline and expects important data readouts, regulatory submissions and approvals throughout the rest of 2026

Over the next couple of years, AbbVie expects new product approval for tavapadon and pivotal data readouts for key pipeline candidates, lutikizumab (hidradenitis suppurativa), Temab-A (metastatic colorectal cancer) and etentamig (third-line-plus multiple myeloma). In May, the FDA approved AbbVie’s key pipeline candidate, Decnupaz/pivekimab sunirine for blastic plasmacytoid dendritic cell neoplasm in the United States. These new products/pipeline programs have the potential to drive long-term growth for AbbVie, while Skyrizi and Rinvoq should boost near-term growth.

AbbVie is evaluating Skyrizi-based combination regimens with assets like ABBV-382 (anti-α4β7) and ABBV-701 (anti-TL1A) to create best-in-class, durable remission therapies in IBD. It has also filed regulatory applications seeking approval of a subcutaneous induction regimen for Skyrizi in Crohn’s disease, which can improve the drug’s competitive positioning and drive an acceleration in sales, once approved.

AbbVie has been on an acquisition spree over the past couple of years to bolster the early-stage pipeline that should drive long-term growth. It is signing several M&A deals in the immunology space, its core area, while also signing some early-stage deals in oncology and neuroscience. The approximately $10.9 billion pending acquisition of Apogee Therapeutics is expected to strengthen its late-stage immunology pipeline.

ABBV’s Struggling Aesthetics Segment

AbbVie has been seeing soft sales of its Aesthetics unit for the past couple of years. Continued macro challenges and economic headwinds are hurting Aesthetics sales. Global aesthetics sales are projected to be $5 billion in 2026, flat from 2025 levels, as moderate growth in Botox Cosmetic is likely to be offset by continued decline in Juvederm sales due to continued headwinds in key dermal filler markets.

AbbVie’s Humira Erosion & Oncology Headwinds

Sales of Humira are declining due to biosimilar erosion. The launch of Humira biosimilars in the United States in 2023 significantly eroded the drug’s sales in 2024 and 2025. Humira sales declined around 38.2% in the first half of 2026 and should continue to decline in the second half as more plans exclude branded Humira and move to exclusive biosimilar contracts.

AbbVie has built a substantial oncology franchise with Imbruvica and Venclexta. However, its oncology sales have slightly slowed down as higher Venclexta sales and contributions from new drugs, Elahere, Epkinly and Emrelis, are being offset by an expected decline in Imbruvica sales. In the second quarter, AbbVie’s oncology sales declined 2.4%. However, AbbVie believes the oncology pipeline is robust with several study readouts and initiations expected this year.

ABBV Stock Price, Valuation and Estimate Revision

ABBV stock has risen 7.8% so far this year compared with an appreciation of 7.6% for the industry.

ABBV Stock Underperforms Industry

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From a valuation standpoint, AbbVie is reasonably priced. Going by the price/earnings ratio, the company’s shares currently trade at 16.03 forward earnings, lower than 18.10 for the industry. However, the stock is trading above its five-year mean of 14.03.  The stock is cheaper than other large drugmakers like Eli Lilly LLY, J&J JNJ and Merck.

ABBV Stock Valuation

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Earnings estimates for 2026 have declined from $14.28 to $14.06 over the past 30 days, while those for 2027 have risen from $16.03 to $16.21 over the same time frame.

ABBV Estimate Movement

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Short-Term Investors Can Exit ABBV Stock

AbbVie combats its share of headwinds, including the impact of Humira LOE, slowing oncology sales, evolving competitive dynamics for Skyrizi and continued macro woes for Aesthetics.

However, despite Humira's U.S. patent expiry in 2023, AbbVie has successfully replaced much of the blockbuster's lost revenues with strong growth from Skyrizi and Rinvoq, easing concerns over its long-term earnings outlook

AbbVie expects a year of robust growth in 2026. It expects total revenues to rise around 10% in 2026, backed mainly by significant momentum in immunology and neuroscience products, which are demonstrating significant growth and delivering share gains in growing markets. It expects high single-digit revenue growth through 2029. Long-term investors can continue to retain this stock as its long-term prospects remain intact.

However, near-term profitability remains affected by acquired in-process research and development charges related to the Apogee acquisition. Short-term investors may consider exiting this Zacks Rank #4 (Sell) stock for now as estimates for 2026 are declining and invest in some better performing drug stocks like Lilly and J&J.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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