Knowing facts before you bet on it

Abbvie (ABBV) is one of the stocks that have recently been observed by Zacks.com visitors. So it could be a good idea to check some of the factors that could influence the short -term performance of the share.

In the past month, the shares of this drug maker returned -8.2% compared to the change of -0.8% from Zacks S&P 500 Composite. During this time, the Zacks Large Cap Pharmaceutical Industry, into which Abbvie falls, lost 2.2%. The key question now is: What could be the future direction of the stock?

Although media reports or rumors about a significant change in the business prospects of a company generally lead to the fact that its shares lead to trend and an immediate change in price, there are always certain basic factors that ultimately advance the purchase and hate decision.

Here at Zacks we prioritize the evaluation of the change in the projection of the future income of a company above all. This is because we believe that the current value of his future profit current determines the current value for its shares.

Our analysis essentially is based on how the analysts of sales pages that cover the shares revises their profit estimates in order to take into account the latest business trends. If the profit estimates for a company increase, the at the time to be accompanied by the current value for its shares. And if the at the time value of a share to be added is higher than the current market price, investors tend to buy the shares, which means that the price is upwards. For this reason, empirical studies indicate a strong correlation between trends in estimating the profits and the short -term share price movements.

Abbvie is expected to make a profit of $ 3.11 per share in the current quarter, which corresponds to a change of +17.4%compared to the previous year. In the past 30 days, the Zacks Consensus estimate has changed by -0.3%.

For the current financial year, the consensus estimate of $ 12.22 refers to a change of +20.8% compared to the previous year. In the past 30 days, this estimate has changed -0.8%.

For the next financial year, the consensus assessment of $ 14 shows a change of +14.6% compared to what ABBVIE is expected a year ago. The estimate of +0.2%has changed last month.

With an impressive external, tested success balance sheet is our proprietary stock assessment tool and the Zacks-rank-rank-a more cozy indicator for the short-term price-performance of a share, since it effectively uses the power of the profit assessment revisions. The size of the recent change in the consensus estimate and three other factors in connection with the profit estimates led to a Zacks rank 3 (Hold) for Abbvie.

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for ABBV _12monthepscharturl

Although the profit growth of a company is probably the best indicator of its financial health, not much happens if it cannot increase its income. It is almost impossible for a company to increase its income without increasing its sales over long periods of time. It is therefore crucial to know the potential sales growth of a company.

In the case of Abbvie, the consensus sales estimate of $ 14.81 billion shows for the current quarter to change +2.4%compared to the previous year. The estimates of 59.73 billion US dollars and $ 64.26 billion for the current and next financial years show changes of +6% or +7.6%.

Abbvie reported a turnover of $ 13.34 billion in the last quarter, which corresponds to a change of +8.4%compared to the previous year. EPS of $ 2.46 for the same period comparable to USD 2.31 a year ago.

Compared to the Zacks Consensus estimate of 12.91 billion US dollars, the registered income is a surprise of +3.39%. The EPS surprise was +2.93%.

The company defeated consensus -epseps estimates in each of the following four quarters. The company exceeded consensus sales every time.

No investment decision can be efficient without taking into account the evaluation of a share. Whether the current price of a share rightly reflects the internal value of the underlying business and the growth prospects of the company is an essential determinant for future price -performance.

The comparison of the current value of the valuation multipliers of a company, such as

The Zacks Value Style Score (part of the Zacks Style Scores Systems), which pays attention to the grade of stocks from A to F both traditional and unconventional valuation metrics (AA is better than a C; and so on) is rather helpful to identify whether a share is overrated, legally valued or temporarily accommodated.

Abbvie is evaluated on this front C, which points out that it is at level with his colleagues. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could help determine whether it is worth paying attention to the Abbvie market or not. However, the Zacks ranked 3rd indicate that it is in line with the broader market at short notice.

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This article was originally published in Zack's Investment Research (Zacks.com).

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