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Amgen (AMGN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Amgen (AMGN) closed at $192.62 in the latest trading session, marking a +1.8% move from the prior day. This change outpaced the S&P 500's 0.8% gain on the day. Meanwhile, the Dow gained 0.47%, and the Nasdaq, a tech-heavy index, added 1.12%.

Prior to today's trading, shares of the world's largest biotech drugmaker had lost 8.29% over the past month. This has lagged the Medical sector's loss of 3.82% and the S&P 500's loss of 1.07% in that time.

Investors will be hoping for strength from AMGN as it approaches 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%. Our most recent consensus estimate is calling for quarterly revenue of $5.63 billion, down 4.63% 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 -3.93%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AMGN. Recent revisions tend to reflect the latest 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. AMGN currently has a Zacks Rank of #2 (Buy).

Investors should also note AMGN's current valuation metrics, including its Forward P/E ratio of 13.23. For comparison, its industry has an average Forward P/E of 27.91, which means AMGN is trading at a discount to the group.

Also, we should mention that AMGN has a PEG ratio of 2.46. 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. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 1.8 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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