CHICAGO — AbbVie Inc. (NYSE: ABBV) stock has surged quietly but steadily, drawing fresh attention from traders and long-term investors betting on its expanding drug pipeline. The pharmaceutical giant reported strong sales growth for newer immunology drugs Skyrizi and Rinvoq during its latest quarterly earnings, offsetting declines from its former blockbuster Humira after biosimilar competition entered the market.

Shares climbed to $193.10 on Friday, up from $172 a month earlier, according to market data. Analysts at firms including JPMorgan and BofA Securities raised price targets, citing AbbVie’s $7.1 billion in 2023 free cash flow and a pipeline featuring 90 programs across oncology, neuroscience and immunology.

The buzz centers on AbbVie’s potential in the red-hot obesity drug market. Company executives highlighted phase 3 trials for emraclidine, a schizophrenia treatment, and early-stage obesity candidates during a January investor call. ‘We’re positioned to capture tailwinds in obesity and oncology without over-reliance on any single asset,’ Chief Financial Officer Robert Michael said on the call.

Humira, once generating $20 billion annually in peak sales for rheumatoid arthritis and Crohn’s disease, saw U.S. revenue drop 40% last year to $8.7 billion as generics flooded in. Skyrizi sales hit $7.8 billion in 2023, up 48%, while Rinvoq doubled to $4.1 billion, per the company’s annual report. These immunology flagships now account for 45% of total revenue.

Oncology adds another layer. AbbVie’s investigational drug telisotuzumab vedotin advanced in lung cancer trials, with data expected mid-2024. The aesthetics division, powered by Botox, posted $5.7 billion in sales, providing steady cash for R&D and acquisitions like the $8.7 billion ImmunoGen buyout in February for antibody-drug conjugates.

AbbVie maintains a 3.2% dividend yield, with 52 straight years of increases. The board approved a 5.8% hike to $1.55 per share quarterly in October. Institutional investors hold 70% of shares, including Vanguard Group with 8.9% stake, filings show.

Still, risks loom. U.S. drug pricing reforms under the Inflation Reduction Act cap Medicare negotiations for high-cost drugs, potentially hitting 2026 margins. Clinical trial setbacks could erase gains; a recent neuroscience flop shaved 2% off the stock in one day last month.

Analysts remain upbeat. Consensus from 24 firms tracked by Bloomberg sets a $192 average price target, with 20 ‘buy’ ratings. ‘AbbVie’s diversified portfolio and dividend discipline make it a core holding,’ wrote Leerink Partners in a February note.

Social media reflects the split. On Reddit’s r/stocks, users praise the yield: ‘ABBV pays me to wait for pipeline hits.’ Others caution on competition from Eli Lilly’s Mounjaro and Novo Nordisk’s Ozempic in obesity.

For U.S. investors, AbbVie trades on NYSE via apps like Robinhood or Fidelity. Shares require standard brokerage accounts; dividends deposit automatically post-ex-date, next on May 15.

The rally coincides with sector rotation into healthcare amid market volatility. AbbVie outperformed the S&P 500 Health Care Index by 8 points year-to-date. Executives project 2024 adjusted earnings of $18.10 to $18.40 per share, above Wall Street’s $18.09 estimate.

Pipeline depth offers long-term upside. Over 20 phase 3 trials run concurrently, including venetoclax combos for blood cancers and upadacitinib expansions. Success here could drive 5-7% annual revenue growth through 2027, per company guidance.