Earnings Previews: AbbVie, Altria, American Airlines, Merck

Pharmaceuticals giant AbbVie Inc. (NYSE: ABBV) posted a 52-week high in early January and is climbing near that level again. AbbVie’s best-selling Humira drug lost its patent protection in January, and the company’s first-quarter report will give some idea of how much negative impact that will have on a drug that generated $18.62 billion in sales last year. Last week, the company reported positive results from a phase 3 study of its Qulipta migraine-preventative treatment.

Brokerage firms have backed off a bit on AbbVie, with 12 of 27 having Buy or Strong Buy ratings and another 14 having Hold ratings. At a recent price of around $164.10, the shares trade just below the median price target of $165.00 is 12.6%. At the high price target of $200.00, the implied gain is 21.9%.

Estimates for the fourth quarter call for revenue of $12.23 billion, which would be down 19.1% sequentially and by 10.7% year over year, while adjusted EPS are pegged at $2.50, down 30.6% sequentially and 20.9% lower year over year. For the full 2023 fiscal year, analysts anticipate EPS of $10.98, a drop of 20.3% year over year, and sales of $52.66 billion, down 9.3%.

AbbVie stock trades at 15.0 times expected 2023 EPS, 14.7 times estimated 2024 earnings of $11.14 and 13.5 times estimated 2025 earnings of $12.14 per share. The stock’s 52-week trading range is $134.09 to $168.11, and AbbVie pays an annual dividend of $5.92 (yield of 3.65%). Total shareholder return over the past year was 9.97%.

Altria

The maker and U.S. distributor of Marlboro cigarettes, Altria Group Inc. (NYSE: MO), had climbed to a recent high in mid-February, after falling to a 52-week low in late September. In early March, Altria wrote down the last $250 million of its disastrous $13 billion investment in Juul. Last week, Altria and Juul settled a Minnesota lawsuit charging the companies with fueling a vaping epidemic among the state’s teenagers. A similar lawsuit began Monday in San Francisco, and thousands more are awaiting litigation.

Sentiment on the stock is positive but not strong. Of 18 analysts covering the shares, 10 have Hold ratings, while another six rate the stock at Buy or Strong Buy. At a share price of around $46.70, the implied gain based on a median price target of $50.00 is 7.1%. At the high price target of $70.00, the upside potential is about 49.9%.

First-quarter revenue is forecast at $7.89 billion, down 3.7% sequentially but up 1.5% year over year. Adjusted EPS are forecast to come in at $1.18, down 0.1% sequentially and 5.4% higher year over year. For the full 2023 fiscal year, Altria is expected to report EPS of $5.05, up about 4.4%, on sales of $21.04 billion, up 1.7%.

Altria stock trades at 9.2 times expected 2023 EPS, 8.8 times estimated 2024 earnings of $5.30 and 8.4 times estimated 2025 earnings of $5.57 per share. The stock’s 52-week range is $40.35 to $57.03, and Altria pays an annual dividend of $3.76 (yield of 8.15%). Total shareholder return over the past year is negative 8.69%.