In December 2018, Amgen Inc. (NASDAQ:AMGN) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, as a -7.8% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of -1.8%. Presently, with latest-twelve-month earnings at US$8.4b, we should see this growing to US$7.7b by 2020. Below is a brief commentary on the longer term outlook the market has for Amgen. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Amgen going to perform in the near future?
Over the next three years, it seems the consensus view of the 20 analysts covering AMGN is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for AMGN, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$8.4b and the final forecast of US$9.0b by 2022, the annual rate of growth for AMGN’s earnings is 4.4%. This leads to an EPS of $14.71 in the final year of projections relative to the current EPS of $12.7. In 2022, AMGN's profit margin will have expanded from 35% to 39%.
Future outlook is only one aspect when you're building an investment case for a stock. For Amgen, I've compiled three fundamental aspects you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Amgen worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Amgen is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Amgen? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.