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

Zacks Equity Research

In the latest trading session, Amgen (AMGN) closed at $204.66, marking a +0.87% move from the previous day. This move lagged the S&P 500's daily gain of 1%.

Heading into today, shares of the world's largest biotech drugmaker had gained 4.54% over the past month, outpacing the Medical sector's loss of 3.21% and the S&P 500's loss of 1.22% in that time.

AMGN will be looking to display strength as it nears its next earnings release, which is expected to be October 29, 2019. On that day, AMGN is projected to report earnings of $3.47 per share, which would represent a year-over-year decline of 5.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.64 billion, down 4.41% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.31 per share and revenue of $22.81 billion, which would represent changes of -0.63% and -3.94%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for AMGN. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. AMGN is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, AMGN is currently trading at a Forward P/E ratio of 14.18. For comparison, its industry has an average Forward P/E of 27.57, which means AMGN is trading at a discount to the group.

Also, we should mention that AMGN has a PEG ratio of 2.64. 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. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 1.9 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 95, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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