Amgen
AMGN
$385.16
-0.64%
Amgen Inc. is a global biotechnology company that develops and manufactures innovative human therapeutics for serious illnesses, including cancer, inflammation, bone health, and rare diseases. As one of the world's largest independent biotech firms, Amgen distinguishes itself through a robust portfolio of blockbuster drugs, a growing biosimilars business, and a strong pipeline, positioning it as a leader in the biopharmaceutical industry. The current investor narrative centers on Amgen's post-Horizon acquisition growth strategy, the commercial performance of newer launches like Tezspire and TEPEZZA, and the company's ability to navigate regulatory and safety concerns, such as the FDA's warning on Tavneos, while maintaining a shareholder-friendly capital return program.…
AMGN
Amgen
$385.16
Related headlines
Investment Opinion: Should I buy AMGN Today?
Amgen is rated a Buy based on its attractive valuation and strong cash flow. The consensus recommendation is 'Buy' with a mean rating of 2.44, and the average target price of $357.03 implies a -7.3% downside, but the high target of $427 suggests upside potential. The stock's forward PE of 16.43x is below the trailing PE of 22.84x, and the PEG ratio of 0.26x indicates undervaluation relative to growth. Revenue growth of 5.8% YoY and a gross margin of 70.8% support the thesis, while free cash flow of $8.6B provides financial flexibility.
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AMGN 12-Month Price Forecast
The AI assessment is neutral with medium confidence. Amgen's valuation is attractive, but the high debt and regulatory risks temper enthusiasm. The stock's low beta and strong cash flow provide stability, but growth is moderate. If the company can reduce debt and resolve Tavneos issues, the stance would upgrade to bullish. Conversely, if regulatory problems worsen or growth decelerates, a downgrade to bearish is warranted.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Amgen's 12-month outlook, with a consensus price target around $357.03 and implied upside of -7.3% versus the current price.
Average Target
$357.03
0 analysts
Implied Upside
-7.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$215 - $427
Analyst target range
Amgen is covered by 29 analysts, with a consensus recommendation of 'Buy' and a mean rating of 2.44 (where 1 is Strong Buy and 5 is Sell). The average price target is $357.03, which implies a -7.3% downside from the current price of $385.16, suggesting that the stock has already surpassed the average analyst expectation. The target range spans from $215.00 (low) to $427.00 (high), with the high target implying a 10.9% upside, reflecting optimism about pipeline success and margin expansion, while the low target suggests concerns about regulatory risks and competition. Recent institutional actions have been mostly neutral, with no major upgrades or downgrades, indicating a stable but cautious sentiment among analysts.
Bulls vs Bears: AMGN Investment Factors
Amgen presents a balanced investment case with strong profitability, attractive valuation, and robust cash flow, but faces significant debt, regulatory risks, and moderate growth. The bull case is supported by a low PEG ratio and forward PE discount, while the bear case highlights high leverage and safety concerns. Currently, the bull side has slightly stronger evidence due to valuation and cash flow, but the key tension is whether Amgen can sustain growth and manage debt while navigating regulatory challenges. The resolution of Tavneos safety issues and tariff negotiations will be critical in determining the stock's trajectory.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 5.8% YoY to $8.618B, with sequential improvement from Q4 2025's $9.896B, indicating solid commercial execution and the Horizon acquisition's contribution.
- Attractive Valuation: Forward PE of 16.43x is 28% below trailing PE of 22.84x, and PEG ratio of 0.26x suggests the stock is undervalued relative to its expected growth, making it a compelling value proposition.
- Strong Profitability: Gross margin is 70.8% and operating margin is 29.1%, reflecting Amgen's efficient cost structure and pricing power in the biotech sector.
- Robust Free Cash Flow: TTM free cash flow is $8.597B, providing ample capacity for debt reduction, R&D investment, and shareholder returns, supporting the dividend and buybacks.
Bearish
- High Debt Levels: Debt-to-equity ratio of 6.31x is extremely high, reflecting the Horizon acquisition's financing. This increases financial risk and interest expense, which was $657M in Q1 2026.
- Regulatory and Safety Concerns: FDA warnings about fatal liver risks linked to Tavneos and global scrutiny over data manipulation pose reputational and commercial risks, potentially impacting sales and legal liabilities.
- Moderate Growth Rate: Revenue growth of 5.8% YoY is modest compared to high-growth biotech peers, and legacy products face patent expirations and biosimilar competition, limiting upside.
- Analyst Target Below Current Price: The average analyst target of $357.03 implies a -7.3% downside from the current price of $385.16, suggesting the stock may be overbought in the near term.
AMGN Technical Analysis
Amgen's stock is in a strong uptrend, with a 1-year price change of +30.5%, significantly outperforming the S&P 500's +18.2% over the same period. The current price of $385.16 sits at 88% of its 52-week range (low $269.77, high $398.00), indicating the stock is trading near its highs, reflecting robust momentum and investor confidence. This positioning suggests the market is rewarding Amgen's operational execution and growth prospects, though it also raises the risk of a short-term pullback given the extended nature of the rally.
Beta
0.40
0.40x market volatility
Max Drawdown
-16.6%
Largest decline past year
52-Week Range
$270-$398
Price range past year
Annual Return
+30.5%
Cumulative gain past year
| Period | AMGN Return | S&P 500 |
|---|---|---|
| 1m | +6.6% | +0.3% |
| 3m | +16.8% | +4.0% |
| 6m | +12.7% | +8.3% |
| 1y | +30.5% | +20.2% |
| ytd | +17.6% | +9.6% |
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AMGN Fundamental Analysis
Amgen's revenue growth has been solid, with Q1 2026 revenue of $8.618 billion, up 5.8% year-over-year, and a sequential improvement from Q4 2025's $9.896 billion. The company's diverse product portfolio, including Prolia ($1.054B), Otezla ($625M), and EVENITY ($599M), is driving growth, while newer drugs like TEPEZZA ($457M) and TEZSPIRE ($474M) are gaining traction. However, the growth rate is moderate, reflecting the maturity of some legacy products and the competitive landscape, but the overall trajectory remains positive, supported by the Horizon acquisition's contribution.
Quarterly Revenue
$8.6B
2026-03
Revenue YoY Growth
+5.8%
YoY Comparison
Gross Margin
68.2%
Latest Quarter
Free Cash Flow
$8.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is AMGN Overvalued?
Given Amgen's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 22.84x, while the forward PE is 16.43x, indicating the market expects significant earnings growth, with the forward multiple implying a 28% discount to trailing. This gap suggests investors are pricing in strong future profitability, likely driven by pipeline catalysts and cost synergies from the Horizon deal. The PEG ratio of 0.26x further underscores that the stock is attractively valued relative to its expected growth, making it a compelling value proposition in the biotech sector.
PE
22.8x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 11x~33x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are elevated due to Amgen's high debt-to-equity ratio of 6.31x, a result of the Horizon acquisition. Interest expense of $657M in Q1 2026 pressures net income, and the company's net margin of 21% is lower than the operating margin of 29% due to interest and other expenses. Cash flow generation of $8.6B TTM provides some cushion, but a rise in interest rates or a downgrade in credit rating could increase borrowing costs and strain the balance sheet. Additionally, the payout ratio of 66% indicates limited room for dividend growth without increasing leverage.
FAQ
The key risks for Amgen include: 1) Financial risk from high debt-to-equity of 6.31x, which could strain cash flow if interest rates rise. 2) Regulatory risk from FDA warnings on Tavneos, which could lead to sales decline and legal liabilities. 3) Competitive risk from biosimilars and new entrants in key therapeutic areas, which could pressure revenue growth. 4) Macro risk from potential tariffs on imported drugs, which could increase costs. The most severe risk is a combination of regulatory and financial issues, which could lead to a -30% downside to the 52-week low.
The 12-month forecast for Amgen is mixed. The base case, with a 50% probability, sees the stock trading around $357, implying a -7.3% downside. The bull case, with a 25% probability, targets $427, a 10.9% upside, driven by pipeline success and regulatory resolution. The bear case, with a 25% probability, could see the stock fall to $270, a -30% downside, if regulatory and debt issues escalate. The most likely scenario is the base case, assuming steady growth and no major setbacks.
Amgen is undervalued relative to its growth prospects. The forward PE of 16.43x is 28% below the trailing PE of 22.84x, indicating the market expects significant earnings growth. The PEG ratio of 0.26x is well below the typical threshold of 1, suggesting the stock is cheap relative to its growth rate. Compared to the biotech sector average, Amgen's PE is lower, reflecting its mature status. The market is pricing in moderate growth and potential risks, but the valuation implies a margin of safety for investors.
Amgen is a good buy for investors seeking a balanced risk-reward profile. The stock trades at a forward PE of 16.43x, which is attractive given its expected earnings growth, and the PEG ratio of 0.26x suggests undervaluation. However, the average analyst target of $357.03 implies a -7.3% downside from the current price, indicating limited near-term upside. The biggest downside risk is the high debt-to-equity ratio of 6.31x and regulatory concerns around Tavneos. For long-term investors with a horizon of 3-5 years, Amgen offers a compelling entry point, but for short-term traders, the stock may be overbought.
Amgen is more suitable for long-term investment due to its moderate growth, low beta of 0.4, and dividend yield of 2.9%. The stock offers stability and income, making it ideal for a long-term portfolio. Short-term trading is possible given the stock's momentum, but the average analyst target suggests limited upside in the near term. A minimum holding period of 3-5 years is recommended to fully benefit from pipeline catalysts and debt reduction, which could drive earnings growth and multiple expansion.