AbbVie Inc. (ABBV) stock intrinsic value fair value estimate & owner earnings analysis

AbbVie is a large research-based drug company. Its 2025 revenue was $61.2 billion, about three-quarters of it from the United States. The business has been reshaped by one event: Humira, once its largest product, lost U.S. exclusivity in 2023. Humira sales fell from $14.4 billion in 2023 to $9.0 billion in 2024 and $4.5 billion in 2025, while the newer immunology drugs Skyrizi ($17.6 billion, up about 50%) and Rinvoq ($8.3 billion, up about 39%) more than replaced them. Together Skyrizi and Rinvoq were about 42% of 2025 revenue, so the company now depends heavily on two products. How we measure earnings. We start from operating cash flow, remove swings in working capital, subtract stock-based pay as a real cost, and subtract only the capital spending needed to keep the business running. On that basis, earnings per share were $9.30 (2020), $12.10 (2021), $13.73 (2022), $10.16 (2023), $9.32 (2024) and $10.46 (2025). We use the six years since the 2020 Allergan acquisition, because earlier years describe a different company, and take the middle value, about $10.30 per share. Large amortization of acquired intangibles is added back, as it is a sunk cost; instead we reflect the aging of those product rights in the way earnings are assumed to fade later. Earnings in 2025 grew about 12% from 2024, while our first-year assumption is 0% growth, below that recent rate. Cash flow from operations in the first half of 2026 ($7.3 billion) was ahead of the first half of 2025 ($6.8 billion), so the level still looks intact. A 2016 figure could not be computed from the stored data, so the series starts in 2017. Base case, about $110 per share. Earnings stay flat at about $10.30 through 2033. We give no credit for further Skyrizi and Rinvoq growth: that growth depends on continued share gains, which we do not count on. Their growth is instead assumed to offset what is already known to be coming off: the remaining Humira decline, Medicare government-set prices on Imbruvica (from 2026), Vraylar and Linzess (from 2027) and Botox (from 2028). The U.S. composition-of-matter patents on Skyrizi's and Rinvoq's active ingredients are expected to expire in 2033. Under settlements reached in September 2025, no generic Rinvoq tablet is expected in the U.S. before April 2037, assuming pediatric exclusivity is granted. We assume earnings decline from 2034 as Skyrizi faces competition, fall further when Rinvoq generics arrive in 2037, and settle at about $3.60 per share afterward, roughly the level the remaining portfolio (Botox, Venclexta, Creon and others) could sustain. That level is held flat with no growth. Bear case, about $76 per share. Skyrizi and Rinvoq growth stops and pricing pressure lands as scheduled, so earnings slip from $10.30 to about $8.00 by 2028, then decline steeply after 2033 to about $2.00 per share. AbbVie carries about $65 billion of debt and long-term lease obligations, with $6.0 billion due in 2026 and $5.1 billion in 2027; this leaves less room for error, and we reflect it here rather than deducting debt from the value. Bull case, about $140 per share. Skyrizi and Rinvoq keep gaining share and expand into more approved uses, lifting earnings about 6% a year to about $13.00 by 2029. Earnings hold there until 2033, then decline more gently, settling at about $5.00 per share. What could make this wrong: earlier-than-expected generic or biosimilar entry (the settlements contain acceleration provisions), further drugs selected for government-set Medicare prices, or a more severe post-2033 decline than assumed. We also assume the company's regular spending on acquisitions and in-licensed drug candidates, which is not part of operating cash flow, keeps the portfolio from shrinking faster than shown. The margin-of-safety price is about $58 per share, well below the bear case, given the dependence on two drugs and the debt load.