How Will AbbVie Stock React To Its Upcoming Earnings?

Forbes

23-04-2025

AbbVie (NYSE:ABBV) is scheduled to announce its earnings on Friday, April 25, 2025. Currently, the company holds a market capitalization of $307 billion. Over the past twelve months, AbbVie generated $56 billion in revenue, achieving an operating profit of $12 billion and a net income of $4.3 billion, indicating operational profitability.
For the upcoming quarter, Wall Street analysts anticipate earnings per share (EPS) of $2.39 on sales of $12.92 billion. This compares to the figures from the same quarter last year, which were $2.31 EPS and $12.31 billion in sales. The anticipated quarterly performance is likely to be fueled by continued strong growth in sales of Rinvoq and Skyrizi, along with Venclexta, which are expected to more than compensate for the anticipated decline in Humira sales.
For event-driven traders, understanding historical stock performance around earnings announcements can offer a potential edge, although the actual market reaction will depend on how the reported results compare to consensus estimates and investor expectations. There are generally two approaches to consider: first, analyzing historical trends to potentially establish a pre-earnings position; second, examining the correlation between immediate and medium-term returns following the earnings release to inform post-earnings trading strategies.
Over the last five years, AbbVie's stock has experienced a negative price reaction on the day following its earnings announcement in 57% of cases. The median negative return during these instances was -1.3%, with the largest single-day negative return reaching -7.3%.
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Some observations on one-day (1D) post-earnings returns:
Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
ABBV 1D, 5D, and 21D post-earnings return
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A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves "long" for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of AbbVie stock compared with the stock performance of peers that reported earnings just before AbbVie. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
ABBV Correlation With Peer Earnings
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