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Amgen (AMGN) Gains As Market Dips: What You Should Know

Zacks Equity Research

Amgen (AMGN) closed at $196.94 in the latest trading session, marking a +0.66% move from the prior day. This move outpaced the S&P 500's daily loss of 0.49%. Meanwhile, the Dow lost 0.59%, and the Nasdaq, a tech-heavy index, lost 0.8%.

Prior to today's trading, shares of the world's largest biotech drugmaker had lost 3.82% over the past month. This has lagged the Medical sector's loss of 0.07% and the S&P 500's gain of 3% in that time.

AMGN will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMGN to post earnings of $3.47 per share. This would mark a year-over-year decline of 5.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.63 billion, down 4.63% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.30 per share and revenue of $22.81 billion. These totals would mark changes of -0.69% and -3.96%, respectively, from last year.

Any recent changes to analyst estimates for AMGN should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. AMGN is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, AMGN is holding a Forward P/E ratio of 13.69. For comparison, its industry has an average Forward P/E of 28.21, which means AMGN is trading at a discount to the group.

It is also worth noting that AMGN currently has a PEG ratio of 2.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 1.77 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 86, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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