AbbVie Inc (NYSE:ABBV) — This biotech company is expected to report results for its second-quarter this morning. Analysts are anticipating an 11% jump in earnings to $1.20 per share on a 13% increase in revenue to $6.2 billion.
This company, which is the result of a spin-off from Abbott Laboratories (NYSE:ABT) in 2013, may not be familiar to some investors. However, it is a large-cap growth stock held by many funds and several ETFs. Its flagship drug Humira is used to treat rheumatoid arthritis.
Capital IQ has a “Buy” rating on ABBV stock with a 12-month price target of $84 on shares. Its analysts estimate the company will grow revenue nearly 12% this year to $25.5 billion on strong sales of Humira.
Turning to the chart, we can see that ABBV stock has advanced from a bottom at about $51 in January. This advanced has surpassed the November closing high at $64.13 and is challenging the recent double-top above $65, which if exceeded, would be a major breakout.
In the process of the advance, ABBV stock triggered a golden cross in May. This is a long-term buy signal in which the 50-day moving average crosses up through the 200-day moving average.
The first support is at $64, with subsequent support at the 50-day moving average at $62.18, and then the bullish support line at about $62. MACD is flat but will improve if the anticipated breakout occurs.
Traders should buy ABBV stock at $64 with a target of $75 for a potential return of more than 17%. Investors looking for representation in the biotech sector should also consider purchasing shares to hold for Capital IQ’s 12-month target of $84, plus the stock’s above-average dividend yield. AbbVie pays an annual dividend of $2.28 per share for a current forward yield of 3.5%.
