AbbVie (ABBV) and Catalyst Pharmaceuticals (CPRX): Analyzing Investment Potential

NYSE: ABBV | AbbVie Inc.  News, Ratings, and Charts

ABBV – The pharmaceutical industry’s inelastic demand for its products helps it to weather economic downturns. With fears of an impending recession playing on the minds of investors, it could be wise to buy fundamentally strong pharmaceutical stock AbbVie (ABBV). On the other hand, given its mixed fundamentals and profitability, it could be wise to add Catalyst Pharmaceuticals (CPRX) to one’s watchlist. Keep reading…

After being thrust into the limelight during the Covid-19 pandemic, the medical-pharmaceutical industry continues to witness solid growth, thanks to the high demand for its products irrespective of the economic cycle.

Pharmaceutical companies are known to maintain their profit margins even during economic downturns due to the nature of their businesses. With a recession expected by the end of the year, it could be wise to buy fundamentally strong pharmaceutical stock AbbVie Inc. (ABBV). On the other hand, Catalyst Pharmaceuticals, Inc. (CPRX) could be added to one’s watchlist.

The increasing prevalence of chronic disease and a rapidly aging population are some of the key factors fuelling the growth of the pharmaceutical industry. The revenue in the worldwide pharmaceuticals market is expected to grow at a compounded annual growth rate (CAGR) of 5.4%, to reach $1.44 trillion by 2027.

Investors’ interest in the pharmaceutical industry is evident from the VanEck Vectors Pharmaceutical ETF’s (PPH) 4.1% return over the past nine months.

Let’s take a closer look at their fundamentals.

Stock to Buy:

AbbVie Inc. (ABBV)

ABBV discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers a wide range of therapies in the areas of immunology, oncology, neuroscience, eye care, virology, and gastroenterology.

On May 19, 2023, The U.S. Food and Drug Administration approved ABBV and Danish drugmaker Genmab’s blood cancer therapy, epcoritamab, for adult patients who have received at least two prior lines of treatment. The therapy, epcoritamab, will be sold under the brand name Epkinly, which treats a type of advanced large B-cell lymphoma. The approval expands ABBV’s product pipeline.

In terms of the trailing-12-month gross profit margin, ABBV’s 70.96% is 27.2% higher than the 55.78% industry average. Its 52.03% trailing-12-month EBITDA margin is significantly higher than the 2.06% industry average. Likewise, its 0.41x trailing-12-month asset turnover ratio is 16.2% higher than the industry average of 0.35x.

For the fiscal first quarter ended March 31, 2023, ABBV’s net revenues came in at $12.23 billion. The company’s non-GAAP after-tax earnings came in at $4.39 billion, while its non-GAAP EPS came in at $2.46.

ABBV’s EPS for fiscal 2024 is expected to increase 1% year-over-year to $11.11. It has an impressive earnings surprise history, surpassing its consensus EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained marginally to close the last trading session at $137.63.

ABBV’s POWR Ratings reflect its solid prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Within the Medical – Pharmaceuticals industry, it is ranked #3 out of 167 stocks. The company has an A grade for Quality and a B for Growth, Value, Momentum, Stability, and Sentiment.

Click here to access all the POWR Ratings of ABBV.

Stock to Watch:

Catalyst Pharmaceuticals, Inc. (CPRX)

CPRX, a commercial-stage biopharmaceutical company, focuses on developing and commercializing therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases in the United States. It offers Firdapse for the treatment of patients with lambert-eaton myasthenic syndrome (LEMS), and Ruzurgi for the treatment of pediatric LEMS patients.

In terms of the trailing-12-month gross profit margin, CPRX’s 77.23% is 38.5% higher than the 55.78% industry average. Its 49.86% trailing-12-month EBITDA margin is considerably higher than the 2.06% industry average. Likewise, its 0.04% trailing-12-month Capex/Sales ratio is 99.1% lower than the industry average of 4.63%.

CPRX’s total revenues increased 98.1% year-over-year to $85.37 million for the quarter that ended March 31, 2023. The company’s operating income increased 105.1% year-over-year to $35.61 million. Its non-GAAP net income increased 141.3% year-over-year to $46.81 million.

Additionally, its non-GAAP EPS came in at $0.41, representing a 127.8% increase over the prior-year quarter. Its total current assets came in at $198.91 million, compared to current assets of $320.81 million for the fiscal year ended December 31, 2022.

CPRX’s EPS and revenue for the quarter ending June 30, 2023, are expected to increase 41% and 76.7% year-over-year to $0.28 and $93.85 million, respectively. It has a commendable earnings surprise history, surpassing its consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 63.8% to close the last trading session at $11.50.

CPRX’s POWR Ratings are consistent with this mixed outlook. It is ranked #43 in the same industry. It has a C grade for Growth.

We have also given CPRX grades for Value, Momentum, Stability, Sentiment, and Quality. Get all CPRX ratings here.

What To Do Next?

Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:

3 Stocks to DOUBLE This Year >


ABBV shares were trading at $136.46 per share on Tuesday afternoon, down $1.10 (-0.80%). Year-to-date, ABBV has declined -13.98%, versus a 10.25% rise in the benchmark S&P 500 index during the same period.


About the Author: Malaika Alphonsus


Malaika's passion for writing and interest in financial markets led her to pursue a career in investment research. With a degree in Economics and Psychology, she intends to assist investors in making informed investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ABBVGet RatingGet RatingGet Rating
CPRXGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

3 Energy Stocks Set to Soar Beyond Expectations

Given the geopolitical tensions, increasing global oil demand, and supply adjustments, the energy sector is poised for robust growth. Therefore, investors might consider investing in energy stocks TechnipFMC (FTI), Weatherford International (WFRD), and ChampionX (CHX), which are poised to exceed expectations. Keep reading…

Has Carnival (CCL) Stock Turned Into a Buy After Earnings Release?

Carnival Corporation (CCL) reported record revenue in its most recent quarter but still faces a negative bottom line. The collapse of Francis Scott Key Bridge brings more uncertainty to its financials. Given these events, what stance should one take with CCL stock? Read more to find out…

3 China Stocks Positioned for Long-Term Growth

Despite facing challenges, the Chinese economy has demonstrated resilience, as evidenced by recent robust industrial output and retail sales data. Given this outlook, it might be an opportune time to own three top-notch China stocks, JD.com, Inc. (JD), China Automotive Systems (CAAS), and Youdao, Inc. (DAO). Read on…

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More AbbVie Inc. (ABBV) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ABBV News