Amgen Inc. (AMGN), headquartered in Thousand Oaks, California, is a pioneer in using technology and human genetic data to manufacture and develop innovative medicines. For more than 40 years, AMGN has been one of the leading players in using living cells to make biological medicines. Valued at $171.14 billion by market cap, it operates across diverse markets such as oncology/hematology, cardiovascular disease, neuroscience, inflammation, bone health and nephrology, and neuroscience.
Shares of this biotechnology giant have outperformed the broader market considerably over the past year. AMGN has gained 40.21% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.9%. However, in 2024, AMGN’s stock rose 9.5%, lagging SPX’s 11.1% rise on a YTD basis.
Zooming in further, AMGN’s outperformance looks more pronounced than VanEck Biotech ETF (BBH). The exchange-traded fund has gained about 6.6% over the past year. Moreover, AMGN’s gains on a YTD basis outshine the ETF’s 2% returns over the same time frame.
AMGN shares rose almost 12% on May 3 after the company reported better-than-expected Q1 revenue and earnings on May 2. Revenue grew 22% year over year to $7.45 billion, and its adjusted EPS came in at $3.96. Ten products from its portfolio delivered double-digit volume growth in the first quarter. For 2024, the company expects total revenues to be between $32.5 billion and $33.8 billion. Its non-GAAP EPS is expected to come between $19 and $20.20.
The jump in AMGN’s shares could also be attributed to optimism surrounding the positive results from a mid-stage study of its obesity injection MariTide. CEO Bob Bradway said that he was “very encouraged” by the early results. The weight loss market is highly lucrative, as some estimates point to a nearly $100 billion market size by the end of the decade. Since its earnings release, the stock has remained sideways.
For the current fiscal year, ending in December, analysts expect AMGN’s EPS to grow 4.3% to $19.46 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 25 analysts covering AMGN stock, the consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” 10 “Holds,” and two “Strong Sells.”
This configuration is slightly more bullish than three months ago, with 11 suggesting a “Strong Buy” and three giving a “Strong Sell.”
Recently, RBC Capital analyst Gregory Renza maintained a “Buy” rating on AMGN stock, with a price target of $328, implying a potential upside of 4.2% from the current levels.
The mean price target of $314.14 represents a marginal downside from AMGN’s current price levels. However, the Street-high price target of $380 suggests an upside potential of 20.7%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
