Amgen Inc. (NASDAQ: AMGN) – Stock Analysis
1. Executive Summary
- Company Name: Amgen Inc.
- Ticker: AMGN
- Sector: Biotechnology / Pharmaceuticals
- Investment Recommendation: Buy – Solid financials and growth potential through obesity drug market entry make it an attractive long-term investment.
2. Company Overview
- Business Model: Global biotech company developing and marketing biologic therapies across oncology, cardiovascular, immunology, and other fields.
- Industry Position: Among the world’s largest biotech firms, with 14 blockbuster products and a broad therapeutic portfolio.
- Key Products/Services: Prolia, Repatha, Enbrel, Tezspire, Evenity, Blincyto.
- Management: Robert A. Bradway (CEO).
3. Financial Analysis
- Revenue Growth: FY2024 revenue: $33.4 billion, up 19% YoY; Q1 2025 revenue: $8.1 billion, up 9% YoY.
- Profitability: FY2024 non-GAAP EPS: $19.84, up 6% YoY.
- EPS: Q1 2025 adjusted EPS: $4.90, beating estimate of $4.30.
- Balance Sheet: FY2024 R&D spending: $6 billion (+25% YoY); free cash flow: $10.4 billion.
- Cash Flow: Maintained strong free cash flow at $10.4 billion in FY2024.
4. Stock Performance
- Current Price: $278.77 (as of May 5, 2025).
- 52-Week Range: $253.30 – $346.85.
- Market Cap: ~$151.2 billion.
- Beta: 0.58 → lower volatility than market.
- Recent Trend: Stock down ~6% over past year; ~18% below July 2024 peak.
5. Valuation Analysis
- P/E Ratio: ~14.1x, attractive relative to peers.
- P/S Ratio: ~4.5x, reflects solid revenue base.
- P/B Ratio: ~4.0x, reasonable asset valuation.
- DCF Analysis: Price includes growth expectations, further upside tied to obesity drug success.
- Peer Comparison: Competitiveness in obesity drug market vs. Eli Lilly, Novo Nordisk is key.
6. Industry & Market Analysis
- Industry Trends: Growing demand for biologics driven by aging population, chronic diseases; obesity drug market projected to reach $100 billion by 2030.
- Market Share: Holds significant share with 14 blockbuster products; expanding into new therapeutic areas.
- Macroeconomic Factors: U.S. tax incentives and biomanufacturing investments support expansion; recently announced $900 million Ohio plant expansion.
7. Risk Analysis
- Market Risk: Revenue pressure from Enbrel and competition in key therapies.
- Financial Risk: High debt increases interest cost exposure if rates rise.
- Regulatory Risk: FDA rules and drug pricing policy could impact profitability.
- Geopolitical Risk: Supply chain and trade policy uncertainties.
8. Growth Catalysts
- New Products/Services: Obesity drug MariTide offers monthly dosing, a convenience advantage over competitors; potential for strong market uptake.
- Expansion Plans: $900 million Ohio biomanufacturing plant to boost production capacity.
- M&A Activity: Horizon Therapeutics acquisition strengthens rare disease portfolio.
- Industry Trend: Surge in GLP-1-based obesity drug demand expected to boost sales.
9. Analyst Sentiment
- Consensus Rating: 10 Buy; 10 Hold; 2 Sell (out of 22 analysts).
- Target Price: Average $308.18 → ~10.5% upside.
- Recent News: Positive outlook for MariTide following promising clinical data.
10. Conclusion
Amgen Inc. demonstrates strong financial health, diversified revenue streams, and growth potential through its obesity drug pipeline.
✅ Current price offers long-term buying opportunity, especially given recent pullback from highs.
👉 Investment Recommendation: Buy – Favorable entry point for long-term investors.
11. Appendix
- Stock Chart: Down ~6% over past year; ~18% below July 2024 high.
- Financial Summary: FY2024 revenue: $33.4B; non-GAAP EPS: $19.84; free cash flow: $10.4B.
- Ownership: ~80% institutional ownership.