AbbVie Stock Higher After Another Collaboration

RBC raised its price target on AbbVie in response

Deputy Editor
Jun 25, 2020 at 2:21 PM
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Last time we checked in on AbbVie Inc (NYSE:ABBV), the company announced an oncology collaboration with biotech company Genmab (GMAB). Today, the drugmaker agreed to another collaboration, this time with a Japanese pharmaceutical company Sosei Group. The deal is reportedly worth up to $1 billion and will focus on inflammatory and autoimmune diseases. In response to the collaboration, RBC raised its price target to $125 from $102.

Analysts were bullish on AbbVie stock even before today. Of the 14 in coverage, 11 dished out "buy" or better ratings. However, ABBV's 12-month consensus price target of $102.44 is a slight 7% premium to current levels, which could indicate additional bull notes are on the way.

ABBV have spent the last three months trading above the 40-day moving average, a trendline that's guided the equity to a rise of nearly 30% in that time. Last seen up 0.7% to trade at $95.64, AbbVie stock is a chip-shot from its June 10 all-time high of $99.34.

ABBV Chart June 25

It's no surprise then that the option pits are flooded with optimism. This is per ABBV's 50-day call/put volume ratio of 3.41 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 96th percentile of its annual reading. This ratio serves to strengthen the sentiment that calls are on the minds of options traders.  

Lastly, it's worth noting that Schaeffer's Volatility Index (SVI) of 33% stands higher than 23% of all other readings in its annual range. This means options players are pricing in relatively low volatility expectations at the moment. 


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