AbbVie's Strong Q4 Fails to Impress Skeptical Market

What happened

AbbVie delivered resilient Q4 2025 results with 10% YoY revenue growth and a 25% increase in adjusted EPS, beating estimates and providing strong forward guidance for FY2026 EPS of $14.37-$14.57. Despite these positive headlines, the stock sold off post-earnings, reflecting market skepticism about underlying vulnerabilities beyond quarterly beats. The DeepValue master report highlights that AbbVie's valuation is already stretched, with a GAAP P/E above 160x, pricing in successful delivery of its Skyrizi/Rinvoq immunology targets. Persistent weaknesses in the aesthetics segment, which has seen consecutive quarterly declines, and flat oncology performance create significant downside risks if immunology growth decelerates. This divergence between operational strength and stock reaction underscores the high investor expectations and the fragility of AbbVie's growth narrative amid elevated leverage and product concentration.

Implication

AbbVie's immunology franchise must sustain high growth rates to justify its rich multiple, but payer pressure and competitive threats could decelerate this, risking the $31B 2027 target. The aesthetics business has shown persistent declines, undermining management's guidance for high-single-digit CAGR and reducing portfolio diversification. Oncology remains flat, failing to offset legacy erosion from Imbruvica, which heightens reliance on immunology and increases concentration risk. High net debt to EBITDA of 4.18x constrains financial flexibility, amplifying downside if earnings disappoint or deal-related spending continues unabated. Therefore, while the Q4 beat and guidance raise are operationally positive, they do not address the core risks identified in the DeepValue report, making the stock's risk-reward profile unattractive at current levels.

Thesis delta

The Seeking Alpha article argues that the market is mispricing AbbVie's resilience, but the post-earnings sell-off reinforces the DeepValue report's bearish thesis that high expectations are already embedded in the valuation. No material shift in the investment thesis is warranted; instead, this event highlights the market's growing sensitivity to AbbVie's underlying risks, such as aesthetics weakness and immunology dependency. Investors should continue to monitor Skyrizi/Rinvoq growth and aesthetics performance for signs of deterioration that could trigger further downside.