AbbVie's 2025 Results Show Immunology Strength Offset by Aesthetics Drag and Deal Costs

What happened

AbbVie reported full-year 2025 net revenues of $61.16 billion, an 8.6% increase, driven by robust growth in immunology and neuroscience portfolios. However, diluted EPS declined slightly due to a $2.76 per share unfavorable impact from acquired IPR&D and milestones expense, highlighting the ongoing costs of its acquisition-heavy strategy. Skyrizi and Rinvoq revenues reached $17.56 billion and $8.30 billion respectively, aligning with the DeepValue report's emphasis on these as core growth engines post-Humira. In contrast, the aesthetics portfolio declined by 6.1%, underscoring persistent weakness that the report flagged as a key risk area. The company provided 2026 adjusted EPS guidance of $14.37 to $14.57, excluding deal costs, which suggests operational confidence but leaves valuation stretched given high multiples and policy uncertainties.

Implication

AbbVie's revenue growth confirms Skyrizi and Rinvoq are successfully replacing Humira, supporting the bull case for immunology dominance and high single-digit CAGR targets. Yet, the aesthetics downturn and significant deal-related expenses highlight ongoing portfolio imbalances and capital allocation risks, echoing the DeepValue report's concerns about earnings quality and balance sheet leverage. The 2026 guidance implies management expects stable margins, but it excludes volatile acquisition costs, potentially masking underlying profitability pressures from price controls and rebates. With the stock trading at ~163x trailing EPS, any deceleration in immunology growth or further aesthetics erosion could trigger a sharp re-rating, as highlighted in the bear scenario. Therefore, trimming positions above $240 and waiting for a pullback toward $185, per the report's recommendation, remains a prudent strategy to manage risk.

Thesis delta

The latest results reinforce the DeepValue thesis that AbbVie's immunology growth is robust but valuations are high, with no material shift indicated. However, the persistent aesthetics weakness and ongoing deal costs underscore the need for vigilance on margin compression and balance sheet health, as these could accelerate downside risks. Investors should closely monitor upcoming quarterly reports for signs of policy impact or growth deceleration in key franchises.