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Amgen (AMGN) Gains But Lags Market: What You Should Know

Zacks Equity Research

Amgen (AMGN) closed at $202.93 in the latest trading session, marking a +0.1% move from the prior day. This move lagged the S&P 500's daily gain of 0.69%. Elsewhere, the Dow gained 0.22%, while the tech-heavy Nasdaq added 0.91%.

Coming into today, shares of the world's largest biotech drugmaker had gained 3.61% in the past month. In that same time, the Medical sector lost 1.39%, while the S&P 500 lost 0.61%.

Investors will be hoping for strength from AMGN as it approaches its next earnings release, which is expected to be October 29, 2019. The company is expected to report EPS of $3.50, down 5.15% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.66 billion, down 4.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.33 per share and revenue of $22.83 billion. These totals would mark changes of -0.49% and -3.88%, respectively, from last year.

Any recent changes to analyst estimates for AMGN should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.24% higher. AMGN is currently a Zacks Rank #3 (Hold).

Looking at its valuation, AMGN is holding a Forward P/E ratio of 14.15. This represents a discount compared to its industry's average Forward P/E of 27.7.

Investors should also note that AMGN has a PEG ratio of 2.68 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMGN's industry had an average PEG ratio of 1.96 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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