A New Combo Rizi-ing To The Occasion

研报英文原文证据摘录

A New Combo Rizi-ing To The Occasion

May 11, 2026

Investment Conclusion

We reiterate our Peer Perform. Unlike 2025, in 2026, we expect US Pharma and Large Cap Biotech sectors

will face relatively few vulnerabilities from Most Favored Nation (MFN) pricing. Recall that in May 2025, Trump

issued a new executive order to reduce prescription drug pricing through an MFN model (see note here). Since

then, led by Pfizer (PFE; see note here), we've seen a number of companies, enter into MFN agreements with

Trump. Importantly, given many key products of these companies were excluded from the agreements (e.g., GILD's

Biktarvy, see here) and companies that have MFN deals are insulated from future pricing mandates (see here), our

outlook is more balanced.

Despite Humira volume erosion, ABBV shares performed well in 2025 (+29%), particularly compared to the

broader Pharma landscape (DRG index: +21%) on the backdrop of strong sales from Skyrizi and Rinvoq in I&I.

Looking to 2026, we suspect shares will perform in-line with the broader Pharma landscape as compared to

prior outperformance, as expectations are already high for it's I&I portfolio. We expect this narrative, together

with concerns on ABBV's upcoming contracting cycle, to color investor sentiment. On a P/E multiple basis, with

14.1x,12.4x, 11.1x, and 10.2x on 2026, 2027, 2028, and 2029 earnings, respectively, ABBV looks balanced,

especially when you compare to historical P/E multiples of 11.7x, 13.9x, 17.6x, and 22.8x on 2022-2025 earnings,

respectively, in our view. Ultimately, we suspect we won't see a further re-rating until we have better visibility on

ABBV's next leg of growth, potentially driven by meaningful M&A.

ABBV Historical and Future P/E Multiples

Historical P/E multiple