Pharmaceutical stocks are getting more attention these days as the global drug market is expected to reach $1.21 trillion in 2025, showing why the industry matters so much. The growth is driven by new treatments coming out and more people needing specialty medicines.
Within this environment, AbbVie (ABBV) delivered third-quarter 2025 results that beat what Wall Street was expecting. The company brought in $15.78 billion in revenue, up 9.1% from the same quarter last year and beating analyst estimates of $15.58 billion.
On top of the strong Q3 numbers, AbbVie announced a 5.5% dividend increase. The quarterly cash dividend is going up from $1.64 per share to $1.73 per share, with the first payment coming on Feb. 17, 2026. This move shows AbbVie remains serious about returning money to shareholders through growing dividends.
The stock has climbed nicely, gaining 15.18% over the past three months. Compare that to the S&P 500 Index ($SPX), which rose 7.50% in the same stretch. AbbVie has handled the transition away from Humira quite well because newer drugs like Skyrizi and Rinvoq are performing strongly.
This raises a key question for investors. The 5.5% dividend increase and solid business performance look good, but does the stock price make sense based on how fast the company is growing and how it stacks up against rivals? Let’s find out.
What Q3 Numbers Reveal About AbbVie’s Health
AbbVie is a drug company that makes medicines in several different areas: immunology, neuroscience, oncology, and aesthetics.
The stock has done well this year, climbing 22.70% since the start of 2025 and gaining 8.21% over the past 52 weeks.
It trades at a forward price-earnings ratio of 21.57x, which is slightly above the healthcare sector average of 18.77x, showing investors are willing to pay a bit more for AbbVie compared to other healthcare companies.
That extra price starts to make sense when you look at the dividend. AbbVie just raised its dividend by 5.5%, bringing the most recent payout to $1.640 per share in October. The dividend yield is around 3.22%, which is way higher than the healthcare sector average of 1.58%.
Even more impressive, the company has raised its dividend every single year for 54 years straight. This shows the company's leaders are confident the business will keep making money. With a payout ratio of 59.92%, the company has room to raise the dividend more in the future while still spending on new medicines. Dividends come out quarterly, giving shareholders regular income.
Q3 earnings had some ups and downs, but overall looked good. Net revenues reached $15.776 billion, growing 9.1% on a reported basis or 8.4% when adjusted for currency. That is solid growth in a tough drug industry. Adjusted earnings per share fell 38% from a year ago, mostly because of $1.50 per share in costs from buying other companies' research projects and hitting milestones.
The New Engines Powering AbbVie’s Growth
AbbVie finished buying Gilgamesh Pharmaceuticals' bretisilocin, a new drug in early testing for severe depression. This drug tackles problems that older treatments couldn't, fixing issues that tripped up earlier versions. Depression drugs are a huge market that's still largely untapped, and getting in early on psychedelic treatments puts AbbVie ahead of rivals trying to bring these therapies to patients.
At the same time, AbbVie closed its acquisition of Capstan Therapeutics and its drug CPTX2309. This treatment targets autoimmune diseases by attacking B cells, but with a major advantage. Unlike standard treatments, it wipes out B cells without harsh chemotherapy and avoids problems tied to other CAR-T therapies. For patients with autoimmune diseases, this is a different approach than current treatments. AbbVie already leads this market with Rinvoq and Skyrizi, so adding this new tool strengthens that position even more.
Beyond just developing new drugs, AbbVie is spending $195 million to expand manufacturing at its North Chicago plant. The investment boosts the company's ability to make drugs for brain problems, immune system issues, and cancer right here in the U.S.
At the same time, construction began on a $70 million expansion at its Worcester Bioresearch Center in Massachusetts. The project adds more space to make biologic drugs and supporting facilities. These moves are part of AbbVie's $10 billion plan to invest in the country and let the company move cancer drugs from Europe to domestic plants.
How Analysts View AbbVie’s Road Ahead
Management showed confidence in the business by raising its 2025 earnings forecast from $10.38 to $10.58 per share up to $10.61 to $10.65 per share. Even though the company took a $2.05 per share hit from research and milestone costs in the first three quarters, it still felt good about raising guidance.
Wall Street has taken notice. In August 2025, BMO Capital analyst Evan Seigerman maintained a "Buy" rating with a $215 price target, showing confidence that AbbVie can do well after Humira's decline. His optimism was based on AbbVie's immune drugs, especially Skyrizi and Rinvoq. These have beaten sales targets and are making up for Humira's decline faster than expected.
Bullish sentiment grew stronger in September when Berenberg Bank upgraded AbbVie from "Hold" to "Buy" and raised its price target from $170 to $270. Berenberg gave credit to management for successfully switching from Humira to newer immune drugs, noting that Skyrizi and Rinvoq keep beating targets as more patients start using them.
Overall, Wall Street is very optimistic. All 28 analysts surveyed give AbbVie a consensus "Moderate Buy" rating, with an average price target of $241.32. From the current price of $218.04, that implies roughly 10.7% upside.
Conclusion
AbbVie’s bold 5.5% dividend hike, outperformance on Q3 results, and steady hand navigating post-Humira realities all make a strong case for its stock as a solid buy, especially for investors wanting both income and credible growth prospects. With analyst targets still showing decent upside, new drug launches boosting the pipeline, and management signaling confidence with raised guidance, it’s hard to argue against the momentum behind shares at these levels. While the stock’s run-up could prompt some near-term cooling, the overall direction looks bullish, with AbbVie’s blend of yield and innovative muscle likely to keep shares trending higher from here.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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