Is AbbVie, Inc. overvalued or undervalued?

As of 31 July 2025, the valuation grade for AbbVie, Inc. has moved from very expensive to risky, indicating a shift in perception regarding its valuation. Based on the current metrics, AbbVie appears to be overvalued. The P/E ratio stands at 23, while its peers, such as Eli Lilly & Co. with a P/E of 40.89 and Johnson & Johnson at 26.18, suggest that AbbVie is trading at a lower multiple compared to some competitors, yet still reflects a high valuation in its own right. Additionally, the EV to EBITDA ratio is 15.67, which is higher than Merck & Co. at 12.15, further supporting the notion of overvaluation.
In terms of returns, AbbVie has outperformed the S&P 500 year-to-date with a return of 24.92% compared to the index's 12.22%. However, over the longer term, its 3-year return of 54.10% trails the S&P 500's 70.41%, indicating that while recent performance has been strong, it has not kept pace with broader market gains. Overall, AbbVie’s high valuation ratios and mixed performance relative to peers and the market suggest that it may be overvalued at its current price of 221.99.