AMGN Surges 5.8% In A Single Day, Time To Buy The Stock?

We believe there is not much to fear in AMGN stock given its overall Strong operating performance and financial condition. Considering stock’s Moderate valuation, we think it is Attractive. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $161 Bil in market cap, Amgen provides discovery, development, manufacturing, and delivery of human therapeutics targeting inflammation, oncology, bone health, cardiovascular disease, nephrology, and neuroscience worldwide.

[1] Valuation Looks Moderate

This table highlights how AMGN is valued vs broader market. For more details see: AMGN Valuation Ratios

[2] Growth Is Moderate

• Amgen has seen its top line grow at an average rate of 10.0% over the last 3 years
• Its revenues have grown 13% from $31 Bil to $35 Bil in the last 12 months
• Also, its quarterly revenues grew 9.4% to $9.2 Bil in the most recent quarter from $8.4 Bil a year ago.

This table highlights how AMGN is growing vs broader market. For more details see: AMGN Revenue Comparison

[3] Profitability Appears Strong

• AMGN last 12 month operating income was $8.2 Bil representing operating margin of 23.5%
• With cash flow margin of 34.4%, it generated nearly $12 Bil in operating cash flow over this period
• For the same period, AMGN generated nearly $6.6 Bil in net income, suggesting net margin of about 19.0%

This table highlights how AMGN profitability vs broader market. For more details see: AMGN Operating Income Comparison

[4] Financial Stability Looks Strong

• AMGN Debt was $56 Bil at the end of the most recent quarter, while its current Market Cap is $161 Bil. This implies Debt-to-Equity Ratio of 35.0%
• AMGN Cash (including cash equivalents) makes up $8.0 Bil of $88 Bil in total Assets. This yields a Cash-to-Assets Ratio of 9.1%

[4] Downturn Resilience Is Strong

AMGN has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• AMGN stock fell 26.7% from a high of $292.39 on 8 November 2022 to $214.27 on 1 June 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 2 January 2024
• Since then, the stock increased to a high of $337.38 on 22 September 2024 , and currently trades at $298.50

 
2020 Covid Pandemic

• AMGN stock fell 24.6% from a high of $241.70 on 15 January 2020 to $182.24 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 April 2020

 
2008 Global Financial Crisis

• AMGN stock fell 47.3% from a high of $75.85 on 22 January 2007 to $39.97 on 19 March 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 11 July 2012

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