Why Amgen (AMGN) Surged While the Market Dipped

In the latest trading session, Amgen (AMGN) demonstrated remarkable resilience, closing at $318.65, which reflects a +0.47% increase from the previous day. This performance stands out, as the broader market showcased a downward trend, with the S&P 500 experiencing a 1.07% loss. Similarly, the Dow Jones Industrial Average declined by 0.62%, and the tech-heavy Nasdaq Composite fell by 1.71%.

Over the last month, Amgen's stock has risen by 8.93%, significantly outperforming the Medical sector, which recorded a modest gain of 0.53%. This growth sharply contrasts with the broader S&P 500, which saw a loss of 7.03% during the same timeframe.

Looking ahead, analysts and investors are keenly anticipating Amgen's upcoming earnings report. Expectations are that the company will report earnings of $4.18 per share, which would indicate a year-over-year growth of 5.56%. Revenue forecasts stand at $8.01 billion, suggesting a 7.52% increase compared to the same quarter last year.

For the full year, projections from the Zacks Consensus Estimates suggest earnings of $20.63 per share and revenues reaching $35 billion. These figures represent growth rates of +3.98% and +4.72%, respectively, from the previous year.

Moreover, it is essential for investors to monitor any recent changes in analyst estimates for Amgen. Adjustments to these estimates often reflect shifting business dynamics and can signal growing confidence among analysts regarding the company's performance and profit potential.

Research indicates a strong connection between revisions in earnings estimates and subsequent stock price movements. To leverage this information, the Zacks Rank—a quantitative model incorporating these estimate changes—offers a rating system for stocks.

The Zacks Rank is graded from #1 (Strong Buy) to #5 (Strong Sell), with a historic record of outperformance; stocks with a #1 rating have averaged a return of +25% annually since 1988. Over the past 30 days, Amgen's consensus EPS projection has increased by 0.14%, and the stock currently holds a Zacks Rank of #3 (Hold).

On the valuation front, Amgen is trading at a Forward P/E ratio of 15.37, which is relatively lower than the industry average Forward P/E of 20.29.

Additionally, Amgen's PEG ratio stands at 2.64. The PEG ratio is a more nuanced metric that not only considers earnings per share but also factors in the expected earnings growth rate. In contrast, the average PEG ratio for the Medical - Biomedical and Genetics industry was 1.56 at the close of the trading day.

This industry segment is part of the broader Medical sector, which has a Zacks Industry Rank of 70, positioning it within the top 28% of more than 250 industry groups.

The Zacks Industry Rank assesses the strength of various industry groups by evaluating the average Zacks Rank of individual stocks. Historical data indicates that the top 50% of rated industries outperform the bottom half by a multiplier of 2 to 1.

Ultimately, keeping track of essential stock metrics, like those provided by Zacks, will be critical for investors to make informed decisions in upcoming trading sessions.

Amgen, Market, Stocks