ABBV

ABBV has visibly navigated the Humira patent cliff: FY2025 revenue grew +8.6% to $61.2B — the strongest growth in the five-year history and a reacceleration off the FY2023 trough ($54.3B) — driven by the next-generation immunology franchise (Skyrizi and Rinvoq) plus neuroscience and aesthetics. Operating income jumped +65% to $15.1B (24.6% margin) and operating cash flow held at a formidable $19.0B. The headline P/E of 107 is misleading: GAAP net income of $4.23B is suppressed by $7.4B of intangible amortization, a $6.5B change in fair value of contingent consideration, and $847M of impairment — largely non-cash, acquisition-related charges from the Allergan deal. On cash flow the stock trades closer to ~24x OCF, a full-but-not-absurd multiple for a durable franchise.

The balance sheet is the cautionary note. Stockholders' equity is negative (-$3.27B) and retained earnings sit at -$15.5B, the cumulative footprint of large acquisitions, $11.7B of dividends, and buybacks. Long-term debt is $64.5B against just $5.23B of cash, and current liabilities ($43.3B) exceed current assets ($29.1B). For most companies this would be alarming; for ABBV it is sustainable only because of the $19.0B operating cash engine — but it leaves little margin for error and means the $11.7B dividend (which exceeds reported net income) depends entirely on cash flow staying robust.