AbbVie Stock Hits a New 52-Week High. Has It Gotten Too Expensive to Buy?
Yahoo Finance ·
When a stock hits a new 52-week high, it can be a sign that things are going well for the business and that investors are recognizing some encouraging value. However, it also means that the stock has become more expensive of late. Thus, it isn't always clear whether it's a good buy, since buying a stock at an elevated price can lead to less-than-stellar returns later on. Healthcare giant AbbVie ( ABBV +0.56% ) hit a new 52-week high on Monday. And in the past 12 months, it's now up around 40%. Can it go even higher, or has its valuation become too rich to make it a good buy? While it may seem like AbbVie has become a hot stock of late, given that it has hit new highs, on a year-to-date basis, it has risen by just around 11%. That's better than the S&P 500 's gains of about 8%, but it hasn't been taking off the way some top growth stocks have. Given the company's level of earnings, the stock should arguably have been trading at a higher price than it has. Even with its rise in value this year, the stock trades at less than 18 times its estimated future earnings (based on analyst expectations). This is still below the S&P 500 average of 21.
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