Company Overview(from AbbVie(ABBV)’s 2022 form 10k)
AbbVie(ABBV)is a global, diversified research-based biopharmaceutical company positioned for success with a comprehensive product portfolio that has leadership positions across immunology, oncology, aesthetics, neuroscience and eye care.
AbbVie’s products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. Certain products (including aesthetic products and devices) are also sold directly to physicians and other licensed healthcare providers. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market works through largely centralized national payers system to agree on reimbursement terms. Certain products are co-marketed or co-promoted with other companies. AbbVie operates as a single global business segment and has approximately 50,000 employees.
Asset structure analysis
The total assets amounted $138.8 billion as of December 31,2022,compared with $146.5 billion as of December 31,2021.
The intangible assets, net was $67.4 billion as of December 31,2022, which accounted for 48.5% of total assets.
The goodwill was $32.1 billion as of December 31,2022, which consisted of 23.1% of total assets.
The both combined of intangible assets and goodwill have 71.6% of total assets. This is a extremely high ratio, which might cause the pressure of debt repayment.
Liquidity and solvency analysis
The total current assets was $28.4 billion and the total current liabilities was $29.5 billion in fiscal 2022.
The current ratio was 0.96, which is lower than 2:1.
The total equity was $17.2 billion as of December 31,2022 and the debt ratio was about 87.6%.
Generally, companies with high debt always have a large number of net cash flow from operating activities. Without exception, AbbVie(ABBV) reported $24.9 billion in cash flows from operating activities in fiscal 2022.
With don’t worry debt, only have you have sufficient cash flows.
Profitability analysis
AbbVie(ABBV) reported net revenues of $58 billion,$56.1 billion and $45.8 billion in 2022,in 2021 and in 2020,respectivly.
The net earnings was $11.8 billion,$11,5 billion and $4.6 billion in 2022,2021 and 2020, respectively.
Net profit margin was 20% for 2022.
The quality of earnings was very high. The cash flows from operating activities was $24.9 billion in 2022 , which was far more than net profit in 2022.Because amortization of intangible assets don’t trigger cash outflow on statement of cash flow, it would be add back to net income.
Cash flow analysis
The cash flows from operating activities was $24.9 billion,$22.7 billion and $17.5 billion in 2022,2021 and 2020.
The cash flows from financing activities was -$24.8 billion,-$19 billion and -$11.5 billion in 2022,2021 and 2020.
The repayments of long-time debt and finance lease obligations was $14.4 billion and the dividends paid was $10 billion in 2022.The both accounts almost consist of 100% of the amount of cash flows from financing activities.
AbbVie(ABBV)’ Q3,2023
The decrease in net revenues was $2.9 billion or 6.7% to $40 billion in the nine months ended September 30,2023, compared with $42.9 billion in the nine months ended September 30,2022.
The net earnings was $4 billion and $9.3 billion in the nine months ended September 30,2023 and in the months ended September 30,2022.
The net earnings fall sharply due to increasing cost of research and development and decreasing revenues.
Summary
We reckon that AbbVie(ABBV) is worth about $200 billion or $113.2 per share ,which is a good buy opportunity.