AbbVie's Future: Growth Outlook and Key Challenges Ahead

Introduction to AbbVie (ABBV)

AbbVie (ABBV) ranks as the third-largest pharmaceutical company in the world, with a market capitalization hovering around $390 billion. It markets around a dozen blockbuster drugs, plus many others that generate millions of dollars in sales each year. That's the snapshot of this giant drugmaker today. But where will AbbVie be in five years?

Easy Predictions for AbbVie's Growth

Some predictions about AbbVie's future are easy to make. For example, I can say without any hesitation that the company will be significantly less dependent on its longtime bestseller Humira five years from now. Humira's sales have steadily declined after biosimilars to the autoimmune disease drug entered the U.S. market in 2023. It's also a no-brainer call that the two successors to Humira, Skyrizi and Rinvoq, will become even bigger winners for AbbVie. These two drugs should rake in combined sales of over $25 billion this year. That's more than Humira generated at its peak. I expect the momentum will continue for Skyrizi and Rinvoq over the next five years. Other drugs in AbbVie's lineup seem destined to keep up their winning ways over the next five years. That list definitely includes multiple myeloma drug Elahere and migraine therapies Qulipta and Ubrelvy. I think AbbVie's juggernaut Botox franchise will still be making the company a ton of money in 2030, too.

AbbVie's Dividends

There's no doubt in my mind that AbbVie will remain a Dividend King five years from now. This elite group consists only of stocks with 50 or more years of consecutive dividend increases. I fully expect that AbbVie will extend its streak of dividend hikes to 58 years by the end of the decade.

Question Marks Surrounding AbbVie's Future

What's not so easy is to forecast what AbbVie's share price or market cap will be five years from now. The big pharma stock has soared more than 150% over the last five years, but there are several major question marks related to its future. Over the near term, the threat of imposing steep tariffs on pharmaceutical imports to the U.S. could weigh on AbbVie. The company maintains significant operations outside the U.S. Management doesn't expect its exposure to tariffs "to be outsized relative to peers." However, that doesn't mean tariffs won't negatively impact the company's profits. It's impossible to know what will happen in the broader economy as well. AbbVie should be able to weather an economic downturn better than most if one comes over the next five years. But a bad economy usually means a bad stock market -- and few stocks deliver jaw-dropping returns when the overall market is flailing. Whether pipeline programs will succeed or flop is a continual uncertainty for drugmakers. AbbVie's phase 3 candidates don't have as much risk of failure as its earlier-stage programs. However, there's always a chance of disappointing results from a clinical trial. I'd also put mergers and acquisitions on the list of question marks for AbbVie over the next five years. The company will almost certainly continue to make business development deals, but the details of those transactions could affect how well its stock performs.

An Educated Guess About AbbVie's Future

Despite the question marks, I'll put forward an educated guess about where AbbVie will be in five years. I predict that the company will deliver a high average annual single-digit share price appreciation. I think AbbVie will grow its market cap to around $600 billion. AbbVie pays an attractive dividend that's likely to keep growing. As mentioned, this stock should also be relatively resilient during economic downturns. With a good chance of double-digit total returns and downside protection, AbbVie is viewed as a solid choice for investors.