Pharmaceutical company AbbVie(NYSE: ABBV) was a cure for the investor blues on Monday. Shares of the company rose more than 2% in price on an analyst's recommendation upgrade. AbbVie stock's resulting pop topped the bellwether S&P 500 index, which managed a comparatively light 1.2% increase on the day.
Barclays upgraded its recommendation to buy
That analyst was Barclays' Carter Gould, who, before market open, pushed up his AbbVie recommendation one peg to overweight (read: buy) from his previous tag of equalweight (hold). He also added a bit of coin to his price target; this is now $170 per share from the prior $160.
Gould's move comes one trading day after AbbVie unveiled its third-quarter results. While the pharmaceutical sector mainstay beat the consensus analyst estimates on both the top and bottom lines and lifted its 2023 guidance, investors traded out of the stock that day.
It wasn't easy to tease out why, given the generally good numbers posted by the company. Some investors might have been concerned with the recent arrival of biosimilar products to its blockbuster drug Humira, although this was entirely foretold and anticipated. Certain drug categories posted uninspiring figures, particularly the immunology category that includes Humira -- its sales slumped by over 11% year over year.
Prognosticator feels that the sell-off was not reasonable
Gould's foundational argument, which certainly has merit given the strength of AbbVie's portfolio and its well-stuffed pipeline, is that the Friday fire sale in the stock was unjustified. In his view, it was due to "external sector dynamics, against a backdrop of Immunology momentum and commentary de-risking 2024 pricing."
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
