Is Amgen Stock Priced Right Against Its Peers?

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Amgen (AMGN) sits in a peer group of six drugmakers with Johnson & Johnson, AbbVie, Merck, Pfizer and Bristol Myers Squibb. Over its latest four fiscal quarters, Amgen ranked second of the six on both revenue growth and operating margin. Yet its P/E ranks only third of the four companies with a comparable one, counting from the highest. How much less are you paying for Amgen’s profit than for Johnson & Johnson’s?

Amgen Costs Less Than Johnson & Johnson

Investors pay 27.0 times Amgen’s earnings over its latest four fiscal quarters, compared with 42.0 times for Johnson & Johnson over its own. During that time, Amgen grew revenue 8.2%, finishing slightly ahead of the 7.8% managed by Johnson & Johnson. Amgen recorded a 32.4% operating margin, against 25.7% for Johnson & Johnson, leaving Amgen with more of each sales dollar as operating profit. Industry classifications group Johnson & Johnson as a pharmaceuticals company and Amgen as a biotechnology one, so part of that margin gap may come from the kind of business each runs.

AbbVie is the only peer that grew faster than Amgen, at 10.7%, and investors pay more for it, at 50.5 times earnings. Bristol Myers Squibb trades at 13.9 times earnings, but its revenue grew just 4.2%. Because Merck and Pfizer each reported a loss in at least one of their latest four quarters, their P/Es are not comparable. Amgen’s discount to Johnson & Johnson does not come with weaker growth or a thinner margin.

Six Fast-Growing Medicines Make Up Most Of Amgen’s Sales

In the third quarter of 2026, six medicines that management counts as its main growth drivers generated more than 70% of Amgen’s product sales. The group collectively grew 27% from a year earlier, management said on the November 3, 2026 call, outpacing the 8% growth in total product sales. Repatha, a cholesterol-lowering drug, recorded $1.1 billion in quarterly sales, up 37%. EVENITY, used in osteoporosis, rose 39% to $751 million.

Amgen has older medicines that are shrinking: ENBREL sales fell 32.9% in 2025, to $2.23 billion. So Amgen’s growth, second in its group, comes from a handful of medicines growing fast enough to more than make up for the declines.

Amgen’s operating margin has risen in each of the past two years. The margin climbed from 19.1% in the twelve months to September 2024 to 24.1% a year later, and increased again in the twelve months to September 2026. It remains below the 36.6% reported for the twelve months to September 2022.

What Amgen Expects For 2026 And 2027

On November 3, 2026, management raised its forecast for 2026 total revenue to a range of $38.9 billion to $39.7 billion. Even the bottom of the new range sits above the $38.8 billion projected in the August 4 forecast. Given that Amgen reported $36.8 billion of revenue for 2025, management expects sales to grow again in 2026. Management also said it does not expect Amgen’s operating margin, based on its own measure, to step down in 2027 from the 2026 guidance.

The nearer pressure is spending: management expects operating expenses to rise meaningfully in the fourth quarter from the third, in line with its usual pattern of higher spending at year-end.

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