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With a market cap of $153.4 billion, Amgen Inc. (AMGN) is a global leader in biotechnology, focusing on innovative human therapeutics across various therapeutic areas including oncology, cardiovascular disease, and neuroscience. With a robust portfolio of blockbuster drugs and a promising pipeline, the company continues to drive advancements in medicine, particularly through its biosimilars and cancer treatments.
Shares of the world's largest biotech drugmaker have underperformed the broader market over the past 52 weeks. AMGN has decreased 10.7% over this time frame, while the broader S&P 500 Index ($SPX) has gained 20.9%. However, AMGN stock has risen 10.8% on a YTD basis, outperforming SPX's 1.9% YTD gain.
Looking closer, the Thousand Oaks, California-based company has also lagged behind the Health Care Select Sector SPDR Fund's (XLV) 4.1% rise over the past 52 weeks.
Amgen's shares recovered 1.5% following its Q3 earnings release on Oct. 30 due to the company’s stronger-than-expected adjusted EPS of $5.58. The revenue growth of 23% year-over-year to $8.5 billion, driven by higher product sales, also helped boost investor sentiment, particularly the strong performance of drugs like Repatha and Blincyto. Additionally, Amgen raised the lower end of its 2024 revenue guidance to a range of $33 billion to $33.8 billion. Despite higher operating costs, investors were reassured by Amgen's promising pipeline and continued success in rare disease treatments post-Horizon acquisition.
For fiscal 2024, which ended in December, analysts expect AMGN's EPS to grow 4.9% year-over-year to $19.56. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 30 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, one “Moderate Buy,” 12 “Holds,” one “Moderate Sell,” and two “Strong Sells.”
On Jan. 28, Citi lowered its price target on Amgen to $295, maintaining a “Neutral” rating due to a more challenging biotech sector outlook in 2025.
As of writing, AMGN is trading below the mean price target of $320.69. The Street-high price target of $405, implies a modest potential upside of 40.1% from the current price levels.
