AbbVie (NYSE:ABBV) recently published the company’s second-quarter 2022 financial data. The results weren’t very different from what Wall Street’s analysts had expected. However, probably due to AbbVie setting aside billions of dollars to resolve lawsuits concerning the marketing of opioid products, ABBV stock hit the skids today.
AbbVie’s Q2 2022 results weren’t terrible. The company’s adjusted diluted earnings of $3.37 per share slightly beat the analyst consensus estimate of $3.32 per share. Moreover, AbbVie’s quarterly revenue of $14.6 billion, up 4.5% year-over-year (YOY), was almost in line with the forecast of $14.7 billion.
A particular highlight was AbbVie’s second-quarter 2022 net revenue from U.S. sales of immunology drug Humira. That figure totaled $4.66 billion, up 9.6% YOY.
In other words, AbbVie’s quarterly results wouldn’t typically cause ABBV stock to slide. However, there was another news item that seems to be impacting the stock’s price action today.
What’s Moving ABBV Stock?
Reportedly, AbbVie has set aside around $2 billion to resolve thousands of lawsuits against the company’s Allergan unit. These lawsuits pertain to Allergan’s alleged marketing of opioid products. Among these products is Allergan’s opioid-based painkiller, Kadian.
More than 3,000 of these lawsuits have been filed by U.S. state and local governments against AbbVie/Allergan. The company has denied wrongdoing, however.
All of this puts AbbVie’s investors in a challenging situation. Should they hold their shares as AbbVie just posted roughly in line fiscal results? Or, should they be concerned enough about the thousands of lawsuits to dump their ABBV stock holdings?
There are other factors to consider, as well. For example, AbbVie now has a trailing 12-month price-to-earnings (P/E) ratio of 20.38. This might make the stock attractive to value-focused investors.
Also, AbbVie pays a forward annual dividend yield of 3.73%. This could make ABBV stock more enticing to investors who like to earn regular income.
In any case, the shares were down 6% this morning, so it looks like some traders decided to sell. It’s up to you, as a prospective investor, to decide whether AbbVie’s lawsuits are a deal breaker, or no big deal.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
