Unlocking Beauty: Why AbbVie (ABBV) is a Top Stock for Aesthetics Now!
December 11, 2024
0 4 minutes read
Get ready to dive into the dynamic world of beauty investments! Today, we’re spotlighting the 11 Top Cosmetic Surgery and Aesthetics Stocks You Must Consider Now. Among these promising stocks, AbbVie Inc. (NYSE:ABBV) stands out, but how does it stack up against its competitors? Let’s uncover the insights!
In a landscape of economic uncertainty, how we spend our beauty bucks is shifting. A recent poll by Bloomberg Intelligence revealed something startling: 40% of beauty consumers are prioritizing their skincare and makeup purchases over other spending. However, this marks the lowest interest in beauty purchases since the survey began two years ago—a troubling 10-point dip since January.
Despite thriving premium products, the demand for budget-friendly beauty items is waning, challenging the heart of the market. Leonard Lauder’s “Lipstick Index” theory, which used to associate economic slumps with increased self-care spending, is showing cracks. Although the beauty market has ballooned in the past five years, experts warn that consumer interests are shifting.
This decline in affordable beauty purchases begs the question: Can the industry weather economic storms? The evidence points to a fascinating trend: high-end products are flourishing while mid-range markets struggle during tougher times.
Interestingly, Ulta CEO Dave Kimbell highlights that younger generations, especially Gen Z and Gen Alpha, are more inclined than ever to splurge on beauty, particularly skincare. He also notes the rise of Hispanic consumers in the U.S., who show an increased engagement in the beauty realm. Kimbell states:
“While we anticipate that some of these headwinds will persist in the near term, we are confident in our ability to deliver on our plans and set ourselves up for long-term growth.”
Looking ahead, the medical aesthetics market is set for explosive growth. Research indicates that products like neuromodulators (think Botox) will see a staggering compound annual growth rate (CAGR) of 11.9% in the U.S. and Canada by 2025. Injectable fillers are also on the rise, with an expected CAGR of 3.8% by 2025. McKinsey’s analysis supports this, forecasting the medical aesthetics industry will soar close to double digits through 2025.
In a recent twist, innovative financing options, like “buy-now, pay-later” schemes, are making cosmetic procedures more accessible amid growing demand in the U.S. While the pandemic-fueled surge in requests has tapered, the number of aesthetic procedures remains significantly higher than pre-COVID levels, according to a June 2024 survey by the American Society of Plastic Surgeons.
These financing programs, which allow patients to break down the costs of procedures ranging from $200 to $10,000 into manageable installments over three to sixty months, are particularly appealing to younger consumers. Many of these plans come with interest-free options and minimal credit requirements, making beauty treatments more attainable. Bloomberg reports a nearly 20% year-over-year increase in sales of asset-backed securities linked to these financial solutions, showcasing a remarkable synergy between consumer demand and creative financing.
To identify the top players in the cosmetics and aesthetics stocks arena, we utilized a stock screener to pinpoint those with the highest institutional ownership. From this curated list, we selected 11 stocks that hedge funds are most excited about, using a comprehensive database of hedge fund sentiments compiled in Q3 2024.
Why should you care about which stocks hedge funds are backing? The answer is straightforward: our research suggests that mirroring the strategies of top hedge funds can lead to outpacing the market. Our quarterly newsletter, which picks 14 small-cap and large-cap stocks, has returned a jaw-dropping 275% since May 2014, beating the benchmark by 150 percentage points.
Number of Hedge Fund Investors: 68
AbbVie Inc. (NYSE:ABBV) is a key player in the biopharmaceutical arena, dedicated to creating and marketing cutting-edge therapies, including sought-after cosmetic and dermatological products. As one of the Top Aesthetics Stocks, AbbVie boasts a robust portfolio featuring BOTOX Cosmetic and JUVÉDERM dermal fillers that tackle wrinkles and facial volume loss.
In Q3 2024, AbbVie reported a 4% year-over-year revenue growth, fueled by the success of its Skyrizi, Rinvoq, and Neuroscience lines. Its aesthetics segment alone generated a staggering $1.239 billion in global net revenues. While Juvederm’s net revenues dipped by 19.7% to $258 million, Botox Cosmetic sales surged by 8.2% to $671 million.
AbbVie is making waves with its innovative Botox treatments, having received FDA approval for new procedures targeting the platysma band and introducing a masseter muscle prominence treatment in China. At the ASDS conference, the company showcased its cutting-edge research and patient-first approach.
For 2024, AbbVie raised its adjusted EPS forecast to an impressive $10.90-$10.94, excluding certain expenses. In a show of confidence, the company also increased its quarterly dividend by approximately 6% to $1.64 per share, marking an impressive 52 years of uninterrupted dividend growth.
Among hedge funds, Citadel Investment Group holds the largest stake in AbbVie, owning over 2.4 million shares valued at $487.28 million as of Q3.
Overall, ABBV ranks 2nd on our list of the best cosmetic surgery and aesthetics stocks to invest in now. While we see great potential in ABBV, we believe that certain AI stocks could yield even higher returns in a shorter span. If you’re on the lookout for an AI stock that presents more promise than ABBV and trades at under five times its earnings, don’t miss our report on the cheapest AI stock.
