DCF Studio

    ABBV · NYQ · Healthcare

    AbbVie Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 325.69

    Market price

    USD 288.84

    Implied upside

    +12.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 20.3x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 325.69+12.8%
    Exit multiple
    USD 376.26+30.3%
    Market price
    USD 288.84

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn17bn33bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 67.8bnUSD 73.9bnUSD 79.8bnUSD 85.7bnUSD 91.3bnUSD 96.5bnUSD 101.2bnUSD 105.3bnUSD 108.8bnUSD 111.5bn+5.7%
    EBITUSD 18.9bnUSD 20.5bnUSD 22.2bnUSD 23.8bnUSD 25.4bnUSD 26.8bnUSD 28.2bnUSD 29.3bnUSD 30.3bnUSD 31.0bn+5.7%
    NOPATUSD 14.9bnUSD 16.2bnUSD 17.5bnUSD 18.8bnUSD 20.1bnUSD 21.2bnUSD 22.2bnUSD 23.2bnUSD 23.9bnUSD 24.5bn+5.7%
    Add depreciation & amortisationUSD 10.0bnUSD 10.9bnUSD 11.7bnUSD 12.6bnUSD 13.4bnUSD 14.2bnUSD 14.9bnUSD 15.5bnUSD 16.0bnUSD 16.4bn+5.7%
    Less capital expenditureUSD -1.1bnUSD -1.5bnUSD -2.1bnUSD -2.7bnUSD -3.3bnUSD -4.0bnUSD -4.7bnUSD -5.4bnUSD -6.1bnUSD -6.9bn+22.9%
    Capex, % of revenue1.6%2.1%2.6%3.1%3.6%4.1%4.6%5.1%5.6%6.1%-
    Less increase in working capitalUSD -1.4bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.2bnUSD -1.1bnUSD -1.0bnUSD -890.0mUSD -745.5mUSD -583.2m-9.5%
    Free cashflow to firmUSD 22.4bnUSD 24.2bnUSD 25.9bnUSD 27.5bnUSD 29.0bnUSD 30.3bnUSD 31.4bnUSD 32.3bnUSD 33.0bnUSD 33.5bn+4.6%
    Discount factor0.96880.90940.85360.80120.75200.70590.66250.62190.58370.5479-
    Present valueUSD 21.7bnUSD 22.0bnUSD 22.1bnUSD 22.0bnUSD 21.8bnUSD 21.4bnUSD 20.8bnUSD 20.1bnUSD 19.3bnUSD 18.3bn-
    Present Value Of The ForecastUSD 209.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.459Reported 0.192, pulled toward 1.0 (Blume)
    Cost of equity6.83%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 6.9x interest cover. Book interest / average debt was lower, at 4.3%.
    Market capitalisationUSD 510.4bn88.3% of capital
    Total debtUSD 67.5bn11.7% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.54%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 325.69

    67% of EV

    Forecast FCFF, final year
    USD 33.5bn
    Capex at depreciation, working capital in reinvestment
    USD 36.3bn
    Less reinvestment at g/ROIC (14.8% of NOPAT)
    USD -5.4bn
    Capitalised
    USD 30.9bn
    ROIC (reported)
    16.9%
    Terminal value, undiscounted
    USD 785.0bn
    Terminal value, discounted
    USD 430.1bn
    Enterprise value
    USD 639.7bn
    Less net debt
    USD 62.2bn
    Equity value
    USD 577.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 376.26

    71% of EV

    Terminal value, undiscounted
    USD 948.6bn
    Terminal value, discounted
    USD 519.7bn
    Enterprise value
    USD 729.3bn
    Less net debt
    USD 62.2bn
    Equity value
    USD 667.1bn

    Spread between methods: 14%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.54%507.52572.47670.08832.201152.03
    5.54%373.45402.38441.32496.22578.80
    6.54%292.58307.15325.69349.88382.51
    7.54%238.47246.25255.84267.84283.15
    8.54%199.74203.93209.03215.28223.04

    Outlined: this model. Green text: above today's price of 288.84. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year1.8%6.2%4.9%
    EBIT margin32.8%27.8%23.6%
    Discount rate-6.5%7.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.