Amgen Inc
AMGN
$347.94
-1.51%
Amgen Inc is a leading biotechnology company focused on developing human therapeutics. It is a major player in the drug manufacturing industry, known for its diverse portfolio of flagship and innovative treatments.
AMGN
Amgen Inc
$347.94
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Investment Opinion: Should I buy AMGN Today?
Based on a synthesis of the data, the objective analyst rating for Amgen is a 'Hold' with a cautiously optimistic bias. The company's strong revenue growth, robust free cash flow, and seemingly undervalued forward earnings (PEG of 0.26) are compelling. However, these positives are significantly tempered by an extremely high debt load and recent profit margin volatility. The stock is not clearly overvalued or undervalued at its current level near the middle of its 52-week range, suggesting investors should wait for either a more attractive price or clearer signs of sustained margin improvement and debt reduction before establishing new positions.
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AMGN 12-Month Price Forecast
The analysis indicates a balanced risk/reward profile. The strong cash generation and reasonable forward valuation provide a floor, but excessive leverage and operational inconsistency create a ceiling for near-term performance, warranting a neutral stance.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Amgen Inc's 12-month outlook, with a consensus price target around $452.32 and implied upside of +30.0% versus the current price.
Average Target
$452.32
15 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
15
covering this stock
Price Range
$278 - $452
Analyst target range
A consensus of 15 analysts provides coverage for Amgen, with an average estimated EPS of $27.55 for the period. Recent institutional ratings from firms like Wells Fargo (Equal Weight), Piper Sandler (Overweight), and UBS (Buy) show a mix of Hold and Buy recommendations, indicating generally positive but cautious sentiment on the stock.
Bulls vs Bears: AMGN Investment Factors
Amgen presents a mixed but leaning positive investment case. Strong fundamentals like revenue growth, cash flow, and attractive forward valuation are countered by high debt, profit volatility, and regulatory risks. The stock's recent pullback may offer a better entry point for long-term investors willing to accept the financial leverage.
Bullish
- Strong Revenue Growth: Q4 2025 revenue grew 8.91% YoY, showing robust demand for its portfolio.
- Attractive Valuation Metrics: Forward P/E of 15.11 and PEG ratio of 0.26 suggest potential undervaluation.
- Exceptional Free Cash Flow: TTM FCF of $8.1B provides strong liquidity for dividends and debt management.
- High Return on Equity: ROE of 89.06% indicates efficient use of shareholder capital, albeit leveraged.
Bearish
- High Debt Burden: Debt-to-equity ratio of 6.31 poses significant financial risk and interest expense.
- Volatile Profitability: Net margin dropped from 33.65% in Q3 to 13.47% in Q4 2025.
- Recent Regulatory Warning: FDA warning on Tavneos liver risks creates safety and commercial uncertainty.
- Recent Price Pullback: Stock down 9.35% in past month, underperforming the S&P 500.
AMGN Technical Analysis
Overall Assessment: The stock has demonstrated strong upward momentum over the past six months, rising 18.31%, significantly outperforming the S&P 500, which declined 2.82% over the same period. This positive trend is supported by a 12.13% relative strength over the last three months. Short-term Performance: However, the stock has faced recent pressure, declining 9.35% over the past month, underperforming the broader market which fell 5.25%. This pullback follows a substantial rally from late 2025 into early 2026. Current Position: The current price of $351.85 sits near the middle of its 52-week range, positioned between the low of $261.43 and the high of $391.29, indicating it has retreated from recent highs but remains well above its yearly low.
Beta
0.42
0.42x market volatility
Max Drawdown
-19.9%
Largest decline past year
52-Week Range
$261-$391
Price range past year
Annual Return
+13.8%
Cumulative gain past year
| Period | AMGN Return | S&P 500 |
|---|---|---|
| 1m | -7.7% | -3.6% |
| 3m | +6.2% | -4.0% |
| 6m | +16.8% | -2.0% |
| 1y | +13.8% | +16.2% |
| ytd | +6.2% | -3.8% |
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AMGN Fundamental Analysis
Revenue & Profitability: The company's Q4 2025 revenue of $9.90 billion grew 8.91% year-over-year. However, profitability was volatile, with Q4 net income of $1.33 billion representing a net margin of 13.47%, a significant improvement from the 6.90% margin in Q4 2024 but down from the 33.65% margin in Q3 2025. Financial Health: The company carries a high debt load, with a debt-to-equity ratio of 6.31. This is offset by a strong trailing twelve-month free cash flow of $8.10 billion, providing substantial liquidity for debt service, dividends, and investments. Operational Efficiency: Return on Equity (ROE) is exceptionally high at 89.06%, though this is partly driven by the high financial leverage. The current ratio of 1.14 indicates adequate short-term liquidity to cover obligations.
Quarterly Revenue
$9.9B
2025-12
Revenue YoY Growth
+0.08%
YoY Comparison
Gross Margin
+0.81%
Latest Quarter
Free Cash Flow
$8.1B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is AMGN Overvalued?
Valuation Level: Given the company's positive net income, the primary valuation metric is the trailing P/E ratio, which stands at 22.84. The forward P/E is lower at 15.11, suggesting expectations of earnings growth. The PEG ratio of 0.26 indicates the stock may be undervalued relative to its projected earnings growth rate. Peer Comparison: Data not available for direct industry average comparisons. Other relevant multiples include a Price/Sales ratio of 4.79 and an EV/EBITDA of 13.99, which provide additional context for the company's valuation relative to its sales and operating earnings.
PE
22.8x
Latest Quarter
vs. Historical
High-End
5-Year PE Range -336x~75x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
14.0x
Enterprise Value Multiple
Investment Risk Disclosure
Amgen's primary risk is its substantial financial leverage, with a debt-to-equity ratio of 6.31. This high debt load increases interest expense pressure and reduces financial flexibility, especially in a rising rate environment. While strong free cash flow ($8.1B TTM) helps service this debt, any earnings disappointment could strain the balance sheet.
Operational risks include volatile quarterly profitability, as seen in the drop from a 33.65% net margin in Q3 2025 to 13.47% in Q4 2025. This inconsistency makes future earnings challenging to predict. Furthermore, the recent FDA warning regarding fatal liver risks associated with Tavneos introduces significant regulatory and commercial uncertainty for one of its rare-disease drugs acquired via Horizon, potentially impacting future sales and necessitating additional safety monitoring or label changes.
Market risks involve the stock's recent underperformance, declining 9.35% over the past month. While some pullback was expected after a strong rally, it highlights sensitivity to broader market sentiment and sector rotations. The high price-to-book and price-to-sales ratios also make the stock vulnerable to multiple contractions if growth expectations are not met.
FAQ
The paramount risk is financial leverage, with a debt-to-equity ratio of 6.31, making earnings sensitive to interest rates. Operational risk includes volatile profitability, as net margin fell sharply from Q3 to Q4 2025. Regulatory risk is highlighted by a recent FDA warning on liver safety for its drug Tavneos. Finally, the stock's high valuation multiples (P/B, P/S) create risk of a price correction if growth slows.
The 12-month outlook presents a base case target range of $340 to $390, centered around analyst expectations. The bull case ($391-$430) depends on successful debt management and pipeline wins, while the bear case ($261-$300) involves regulatory setbacks and margin pressure. The AI assessment assigns a 50% probability to the base case, 30% to the bull case, and 20% to the bear case, reflecting a neutral overall stance.
AMGN appears fairly valued to slightly undervalued based on forward earnings. The trailing P/E of 22.8 is high, but the forward P/E of 15.1 suggests expected earnings growth. The PEG ratio of 0.26, based on the provided data, indicates potential undervaluation relative to growth. However, this must be weighed against high multiples like P/B of 20.3 and P/S of 4.8, which demand flawless execution to justify.
AMGN is a 'Hold' at its current price of $351.85. While the company has strong fundamentals like 8.9% revenue growth and $8.1B in annual free cash flow, the extremely high debt-to-equity ratio of 6.31 and volatile quarterly profits introduce substantial risk. The forward P/E of 15.1 is reasonable, but investors may want to wait for a better price or clearer signs of debt reduction and margin stability before buying.
AMGN is more suitable for long-term investors who can tolerate its high debt load and wait for its growth initiatives and pipeline to mature. The stock's recent volatility and sensitivity to quarterly earnings make it challenging for short-term trading. Long-term holders can benefit from the company's strong market position, cash flow, and dividend, provided management successfully navigates its leverage over time.