Amgen (AMGN) Outpaces Stock Market Gains: What You Should Know

Amgen (AMGN) closed at $353.93 in the latest trading session, marking a +1.58% move from the prior day. This move outpaced the S&P 500's daily gain of 0.54%. At the same time, the Dow added 0.66%, and the tech-heavy Nasdaq gained 0.77%.

The world's largest biotech drugmaker's shares have seen a decrease of 9% over the last month, not keeping up with the Medical sector's loss of 8.43% and the S&P 500's loss of 4.71%.

The investment community will be paying close attention to the earnings performance of Amgen in its upcoming release. It is anticipated that the company will report an EPS of $4.74, marking a 3.27% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.51 billion, up 4.42% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $22.22 per share and revenue of $37.86 billion. These totals would mark changes of +1.74% and +3.02%, respectively, from last year.

Any recent changes to analyst estimates for Amgen should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Currently, Amgen is carrying a Zacks Rank of #3 (Hold).

Looking at valuation, Amgen is presently trading at a Forward P/E ratio of 15.68. This signifies a discount in comparison to the average Forward P/E of 17.97 for its industry.

One should further note that AMGN currently holds a PEG ratio of 3.47. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 1.46 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. With its current Zacks Industry Rank of 146, this industry ranks in the bottom 41% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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