On Thursday, Piper Sandler adjusted its outlook on Amgen stock, reducing the price target to $310 from the previous $344 while retaining an Overweight rating.
Currently trading at $263.16, near its 52-week low, InvestingPro analysis suggests the stock is undervalued, with a "GOOD" overall financial health score. The adjustment comes as the firm acknowledges potential revenue impacts due to the loss of exclusivity on several of Amgen's key drugs.
However, Piper Sandler expresses a positive view of the company's future, citing a robust late-stage pipeline that could sustain revenue and EBITDA through the decade. This outlook aligns with Amgen's strong revenue growth of 21.25% and EBITDA of $12.25 billion in the last twelve months.
Amgen's pipeline includes expansion opportunities for existing drugs, like Uplizna for IgG4-related disease and Tezspire for chronic obstructive pulmonary disease, as well as the introduction of new products such as rocatinlimab for atopic dermatitis. Additionally, the company's growing presence in the biosimilars market is seen as a contributor to its long-term financial stability.
The research firm highlights the potential of MariTide, an obesity treatment, to drive more aggressive EBITDA growth post-2030. Piper Sandler believes that even if MariTide only achieves a "me too" weight loss profile, its less frequent dosing requirements could still create a significant commercial presence, provided side effects like nausea and vomiting are managed with lower initial doses.
Piper Sandler's outlook is based on the belief that these factors, combined with current valuation metrics, suggest a path to multiple expansion for Amgen. The firm notes that Amgen's current enterprise value to estimated 2025 EBITDA ratio stands at approximately 12 times, implying room for growth in the company's stock valuation.
With a P/E ratio of 33x and consistent dividend growth of 11.74% year-over-year, InvestingPro subscribers can access over 30 additional financial metrics and exclusive analysis in our comprehensive Pro Research Report, helping investors make more informed decisions about this prominent biotech player.
In other recent news, Viking Therapeutics (NASDAQ:VKTX) experienced a surge in stock following disappointing results from Novo Nordisk (NYSE:NVO)'s obesity drug trial, according to Jefferies analyst Peter Welford. This development has led to a reassessment of the competitive landscape in the obesity drug market, with Viking Therapeutics potentially standing to benefit.
In a recent "Biotech Outlook" report, RBC Capital Markets highlighted several promising biotech companies, including Regeneron (NASDAQ:REGN) Pharmaceuticals and Amgen Inc (NASDAQ:AMGN). The firm maintains solid fundamentals for both companies, anticipating strong growth drivers, including the launch of new treatments and significant clinical readouts.
Amgen has recently announced a $1 billion investment in a second drug substance manufacturing facility in North Carolina. This expansion is expected to incorporate advanced technologies and sustainable practices, reflecting Amgen's commitment to environmental stewardship and manufacturing excellence.
TD Cowen reaffirmed its Buy rating for Amgen, highlighting the potential advantages of MariTide's dosing schedule in the competitive obesity market. Leerink Partners, while maintaining a Market Perform rating, has revised its long-term earnings growth projection for Amgen due to anticipated higher investment spending.
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