Option Trade 
AbbVie Inc (NYSE:ABBV) Calls 
Wednesday, January 27, 2016

**OPTION TRADE: Buy the ABBV May 2016 60.000 call (ABBV160520C00060000) at approximately $2.70. Place a pre-determined sell at $5.50.

Note: No protective stop losses added -- but if you wish to do so make it $1.10.

by Ian Harvey

January 27, 2016

AbbVie Inc (NYSE: ABBV), a global research-based pharmaceuticals company, is scheduled to release its Q415 earnings data before the market opens on Friday, January 29th.

Analysts expect AbbVie to post earnings of $1.13 per share and revenue of $6.41 billion for the quarter. AbbVie has set its FY15 guidance at $4.26-4.28 EPS and its FY16 guidance at $4.90-5.10 EPS.

The company, which in October forecast double-digit EPS growth through 2020, had some good news earlier this month when U.S. patent officials denied Amgen's efforts to market a biosimilar version of its drug Humira; which is considered the world's top-selling prescription medicine. Investors will be looking for additional color on other patent challenges and biosimilar developers, and also how the FDA-mandated potential liver injury warning on AbbVie's hepatitis C drugs have impacted sales.

Shares of AbbVie Inc opened at 58.26 on Wednesday. The firm has a market capitalization of $95.24 billion and a PE ratio of 33.79. AbbVie Inc has a 1-year low of $45.45 and a 1-year high of $71.60. The firm’s 50 day moving average is $56.83 and its 200 day moving average is $60.42.

The shares of AbbVie Inc currently has mean rating of 2.12 while 3 analysts have recommended the shares as “BUY”, 9 recommended as “OUTPERFORM” and 5 recommended as “HOLD”. The rating score is on a scale of 1 to 5 where 1 stands for strong buy and 5 stands for sell.

The company’s mean estimate for sales for the current quarter ending Dec-15 is 6.39B million by 14 analysts. The means estimate of sales for the year ending Dec-15 is 22.87B million by 16 analysts.

The mean price target for the shares of AbbVie Inc is at 73.13 while the highest price target suggested by the analysts is 85.00 and low price target is 56.00. The mean price target is calculated keeping in view the consensus of 15 brokerage firms.

The average estimate of EPS for the current fiscal quarter for AbbVie Inc stands at 1.12 while the EPS for the current year is fixed at 4.29 by 17 analysts.

The next one year’s EPS estimate is set at 5.03 by 18 analysts while a year ago the analysts suggested the company’s EPS at 4.29. The analysts also projected the company’s long-term growth at 20.21% for the upcoming five years.

Last quarter AbbVie Inc reported Q3 EPS of $ 1.13, topping the consensus estimate of $ 1.06. Revenue came in at $ 4.94B, which was below the consensus $ 5.9B projection. Looking back further, it reported an increase in revenues to $ 5.48Bin Q2 from $ 5.04B in Q1. The consensus estimate was of $ 5.62B and $ 4.98B, respectively.

Acadian Asset Management increased its stake in AbbVie Inc by 52.5% during the fourth quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The hedge fund owned 35,158 shares of the company’s stock after buying an additional 12,105 shares during the period. Acadian Asset Management’s holdings in AbbVie were worth $2,083,000 at the end of the most recent reporting period.

A number of other hedge funds have also recently modified their holdings of ABBV. Renaissance Investment Group boosted its stake in shares of AbbVie by 19.2% in the fourth quarter. Renaissance Investment Group now owns 8,508 shares of the company’s stock worth $504,000 after buying an additional 1,368 shares during the period. Ken Stern & Associates boosted its stake in shares of AbbVie by 15.9% in the third quarter. Ken Stern & Associates now owns 5,850 shares of the company’s stock worth $318,000 after buying an additional 802 shares during the period…..to name a few…

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the ABBV May 2016 60.000 call (ABBV160520C00060000) at approximately $2.70. Place a pre-determined sell at $5.50.

Note: No protective stop losses added -- but if you wish to do so make it $1.10.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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