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Is AbbVie (ABBV) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
AbbVie (ABBV - Free Report) is a stock many investors are watching right now. ABBV is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.53, while its industry has an average P/E of 16.02. Over the last 12 months, ABBV's Forward P/E has been as high as 10.29 and as low as 5.96, with a median of 8.12.
We also note that ABBV holds a PEG ratio of 1.93. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ABBV's industry has an average PEG of 2.08 right now. ABBV's PEG has been as high as 2.44 and as low as 1.26, with a median of 1.70, all within the past year.
Finally, our model also underscores that ABBV has a P/CF ratio of 13.52. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ABBV's current P/CF looks attractive when compared to its industry's average P/CF of 16.51. Over the past year, ABBV's P/CF has been as high as 25.71 and as low as 9.68, with a median of 16.02.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AbbVie is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABBV feels like a great value stock at the moment.