Key Takeaways
- AbbVie raised 2026 adjusted EPS guidance to $13.95 to $13.99 and lifted its quarterly dividend 5.2% to $1.82, as Skyrizi and Rinvoq sales each grew more than 22%.
- The GAAP payout ratio of 275.84% overstates the strain: the new $7.28 annual dividend uses about 52% of adjusted earnings, and Street estimates put that near 40% by 2028.
- The stock’s run to a record $294.89 has cut the forward yield to about 2.47%, which puts the focus on 2027 guidance at the fourth-quarter call.
AbbVie (ABBV) gave dividend investors the answer they were waiting for on Friday, October 30. Its third-quarter report showed revenue of $17.404 billion, up 10.3%, and adjusted EPS of $3.82. It also raised full-year adjusted EPS guidance to $13.95 to $13.99, from $13.76 to $13.96, and lifted the quarterly dividend 5.2% to $1.82 a share, starting with the February 16, 2027 payment.
Skyrizi and Rinvoq did the heavy lifting again. Skyrizi sales rose 22.7% to $5.776 billion and Rinvoq rose 23.9% to $2.706 billion, and on the earnings call management lifted their full-year targets to $21.8 billion and $10.3 billion. The stock closed at a record $294.89, up 1.4%.
The Question AbbVie Had to Answer
In September, AbbVie stock’s 2.74% yield sat near a two-year low while its payout ratio looked stretched. The open question was simple: could earnings grow fast enough to fund another raise without the payout climbing further?
Friday’s numbers say yes. The headline doubling in Q3 adjusted EPS, from $1.86, is mostly a base effect: last year’s quarter carried a $1.50 charge for acquired R&D, against $0.11 this time. Strip that out of both quarters and adjusted EPS still rose about 17%, from $3.36 to $3.93. A 5.2% dividend increase is a small slice of that.
AbbVie’s Payout Looks Worse on Paper Than in Cash
On a GAAP basis, AbbVie hasn’t covered its dividend for three straight years. TIKR shows the payout ratio climbing from 216.72% in 2023 to 275.84% in 2025.
Those figures are driven by non-cash items. In Q3 alone, intangible amortization and contingent-consideration charges took $1.25 off GAAP EPS, which came in at $2.37. Cash tells a different story: AbbVie generated about $14 billion of free cash flow in the first nine months, roughly 1.5 times the $9.2 billion or so it paid in dividends over the same stretch.
Against adjusted earnings, the new $7.28 annual dividend uses about 52% of the guidance midpoint. The Street expects that share to keep falling.
Analysts expect normalized EPS of $16.16 in 2027 and $18.00 in 2028, growth of 15.1% and 11.4%. Holding the dividend at $7.28, the payout would drop to about 45% in 2027 and 40% in 2028. Even a few more 5% raises leave room to spare.
TIKR Tracks 29 Analysts on AbbVie. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on AbbVie, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See AbbVie’s Analyst Ratings
The Catch Is the Price
The dividend got safer, but buying it got pricier. The stock is up about 12% from the $263 it traded at in September, and the yield has slid with it.
The trailing yield now sits at 2.35%, below the 2.65% floor the September piece flagged and well under the 3.12% average on TIKR’s chart. Even on the new $1.82 payment, the forward yield is only about 2.47%.
The guidance raise also deserves a closer look. The new range implies fourth-quarter EPS of $3.83 to $3.87, only a few cents above what the old midpoint implied. Most of the $0.11 lift is Q3’s beat carried forward, not a stronger Q4.
AbbVie’s February Guidance Is the Next Test
Management will give 2027 guidance on the fourth-quarter call (last year’s came on February 4), and CEO Rob Michael said on Friday’s call that he expects “top-tier growth again next year.” That forecast has to absorb the Medicare negotiated price for Vraylar, which starts in 2027.
The dividend question is settled. A 52% adjusted payout falling toward 40% is not a strained dividend. The open question is the stock: at a 2.47% forward yield, holders are paying for that 15% EPS growth in 2027. If February’s guide lands near the Street’s $16.16, the price holds up. A guide closer to the low teens in growth would leave a record-high stock with less support underneath.
So What Is AbbVie Stock Actually Worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
