AbbVie Inc (ABBV) receives a strong valuation ranking of 86 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. ABBV has a better value than 86% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
Metrics Analysis
ABBV has a trailing twelve month Price to Earnings (PE) ratio of 18.7. The historical average of roughly 15 shows a average value for ABBV stock as investors are paying fair share prices relative to the company's earnings. ABBV's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 4.69 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
ABBV currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.4. The market is currently overvaluing ABBV in relation to its projected growth due to the PEG ratio being above the fair market value of 1. ABBV's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.
Summary
All together these valuation metrics paint a pretty poor picture for ABBV at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for ABBV are worse than the average of the market resulting in a valuation score of 86.
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