Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 5.4 |
| EV/EBITDA | 1.7 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 15.6x
- ▸PEG: 0.42
ABBV · Why this verdict
Why AbbVie (ABBV) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
AbbVie generates exceptional cash flow at 573% of net income with positive price momentum, but the stock sits just below its near-term price target with an unfavorable risk/reward of 0.44-to-1 and meaningful concentration risk across both major customers and single-source suppliers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business converts reported earnings into cash at an exceptional rate, with free cash flow running at 573% of net income, supported by strong gross and operating margins and a Rule of 40 score of 46. Quality breakdown | Free cash flow conversion sustains above 400% of net income over the next 12 months, confirming durable cash generation quality. | →Stable |
| CounterExceptional FCF conversion that substantially exceeds 100% of net income may reflect non-recurring items or timing; if the customer concentration risk materializes and distributor relationships deteriorate, revenue and cash generation could weaken faster than reported earnings suggest. | ||
Volume accumulation (rising on-balance volume) combined with the stock trading above its 200-day moving average points to a positive price momentum trend that has not yet reversed. Momentum breakdown | On-balance volume continues to rise and the stock sustains above its 200-day moving average for the next 12 months. | ↑Improving |
| CounterThe stock sits just below the analyst take-profit target with only about 2.3% of upside remaining; at these levels, buying interest may fade and even mild negative news could shift volume from accumulation to distribution quickly. | ||
The business carries meaningful customer concentration risk with reliance on McKesson, Cardinal Health, and Cencora as major distributors, alongside single-source supplier dependencies — both represent structural vulnerabilities if any one relationship deteriorates. Bear case | Revenue remains stable with no material attrition from concentrated distributors or supply disruptions over the next 12 months. | →Stable |
| CounterThe concentration risk is disclosed at the 10-K level; if the distributor and supplier relationships remain operationally stable over the near term, the business may continue to generate consistent results without material disruption to revenue. | ||
With only about 2.3% remaining to the take-profit target and an unfavorable risk/reward of 0.44-to-1, the current setup does not offer a compelling near-term return opportunity relative to the potential downside. Price targets | The setup improves if the price pulls back toward $195, opening more than 17% of upside to the $228 take-profit target. | →Stable |
| CounterThe take-profit target reflects current analyst consensus and is not a ceiling; if the company's earnings trajectory improves materially in coming quarters, that target may be revised higher, restoring a more favorable risk/reward. | ||
The business converts reported earnings into cash at an exceptional rate, with free cash flow running at 573% of net income, supported by strong gross and operating margins and a Rule of 40 score of 46.
→StableQuality breakdown
- Expectation
- Free cash flow conversion sustains above 400% of net income over the next 12 months, confirming durable cash generation quality.
CounterExceptional FCF conversion that substantially exceeds 100% of net income may reflect non-recurring items or timing; if the customer concentration risk materializes and distributor relationships deteriorate, revenue and cash generation could weaken faster than reported earnings suggest.
Volume accumulation (rising on-balance volume) combined with the stock trading above its 200-day moving average points to a positive price momentum trend that has not yet reversed.
↑ImprovingMomentum breakdown
- Expectation
- On-balance volume continues to rise and the stock sustains above its 200-day moving average for the next 12 months.
CounterThe stock sits just below the analyst take-profit target with only about 2.3% of upside remaining; at these levels, buying interest may fade and even mild negative news could shift volume from accumulation to distribution quickly.
The business carries meaningful customer concentration risk with reliance on McKesson, Cardinal Health, and Cencora as major distributors, alongside single-source supplier dependencies — both represent structural vulnerabilities if any one relationship deteriorates.
→StableBear case
- Expectation
- Revenue remains stable with no material attrition from concentrated distributors or supply disruptions over the next 12 months.
CounterThe concentration risk is disclosed at the 10-K level; if the distributor and supplier relationships remain operationally stable over the near term, the business may continue to generate consistent results without material disruption to revenue.
With only about 2.3% remaining to the take-profit target and an unfavorable risk/reward of 0.44-to-1, the current setup does not offer a compelling near-term return opportunity relative to the potential downside.
→StablePrice targets
- Expectation
- The setup improves if the price pulls back toward $195, opening more than 17% of upside to the $228 take-profit target.
CounterThe take-profit target reflects current analyst consensus and is not a ceiling; if the company's earnings trajectory improves materially in coming quarters, that target may be revised higher, restoring a more favorable risk/reward.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 6.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 2.9 |
| Current ratio | 3.2 |
| FCF quality | 10.0 |
| Moat | 7.0 |
| Rule of 40 | 7.7 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 573% FCF/NI
- ▸Rule of 40: 46 (pass)
Growth
2.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.6 |
| EPS growth | 0.0 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.2 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.5 |
| Price target | 5.6 |
- ▸LLM news sentiment: +0.31 (n=5)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.3 |
| quality rank | 1.3 |
| growth rank | 7.5 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.3 |
| support resistance | 1.6 |
| 52w position | 9.6 |
Risk (lower is worse)
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.3 |
| days to cover | 8.3 |
| volatility | 6.4 |
| put call | 9.2 |
| implied vol | 6.7 |
| beta | 10.0 |
| news risk | 5.5 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.5 |
| dividend safety | 3.5 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 10 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (2)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
- EARNINGS_PROXIMITY:10d<=14d (soft)
Reward-to-Risk
-0.61
Upside
-6.3%
Downside
10.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 10d with 3/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.6=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.61 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.9, Insider at 7.3, and Quality at 7.1; the weakest are Growth at 2.8, Peer rank at 3.5, and Technical at 4.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.61 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Free Cash Conversion
Trip ifFCF/NI ratio falls below 300% for 2 consecutive quarters.
- P2Positive Price Momentum Continuation
Trip ifPrice falls below $200 for 5 consecutive trading sessions.
- P3Customer Supplier Concentration Risk
Trip ifEPS surprise exceeds 2% for 4 consecutive quarters.
- P4Limited Upside At Analyst Target
Trip ifPrice falls below $195, creating at least 17% upside to the $228 take-profit target.