Amgen Inc.

(NASDAQ Global Select)
Back to all articles
Bullish +72

Is Amgen Stock Priced Right Against Its Peers?

Financial outlook AI-generated analysis

📊 Amgen ranks second among six major drugmakers in both revenue growth and operating margins over the latest four fiscal quarters.

💰 Investors pay 27.0 times earnings for Amgen compared to 42.0 times for Johnson & Johnson, despite Amgen's superior profitability metrics.

🚀 Six core medicines drove a 27% year-over-year growth in product sales during the third quarter of 2026.

💊 Repatha generated $1.1 billion in quarterly revenue with a 37% increase, while EVENITY sales rose 39% to $751 million.

📉 Older drug ENBREL sales declined 32.9% in 2025, but high-growth assets more than compensated for the loss.

📈 Operating margins expanded from 19.1% in late 2024 to 32.4% in the most recent twelve-month period.

🔮 Management raised its 2026 revenue forecast to a range of $38.9 billion to $39.7 billion, exceeding prior guidance.

⚠️ The article notes that Amgen's lower P/E ratio does not reflect its lead over peers in growth and margin performance.

📅 Full-year 2026 results are expected to be reported in February 2027 against the raised revenue range.

Bullish Signals
  • Amgen ranked second among six major drugmakers in both revenue growth and operating margins over the latest four fiscal quarters.
  • The company achieved a 32.4% operating margin, significantly higher than Johnson & Johnson's 25.7%, demonstrating superior profitability per sales dollar.
  • Six key medicines collectively grew 27% year-over-year in Q3 2026, outpacing the 8% growth in total product sales.
  • Repatha recorded $1.1 billion in quarterly sales with a 37% increase, while EVENITY rose 39% to $751 million.
  • Management raised its full-year 2026 revenue forecast to $38.9-$39.7 billion, exceeding the previous August projection of $38.8 billion.
  • Operating margins have risen for two consecutive years, climbing from 19.1% in late 2024 to 32.4% in the most recent period.
Risk Factors
  • Amgen trades at a lower P/E multiple than peers like Johnson & Johnson and AbbVie despite having superior growth and margin performance.
  • Sales of older blockbuster drug ENBREL fell 32.9% in 2025 to $2.23 billion, creating reliance on newer high-growth assets.
  • Operating expenses are expected to rise meaningfully in the fourth quarter of 2026 following the company's usual year-end spending pattern.
Full Analysis
Amgen (AMGN) is analyzed as a high-performing biotechnology peer that currently trades at a valuation discount compared to its largest competitor, Johnson & Johnson. Despite ranking second among six major drugmakers in both revenue growth and operating margins over the last four fiscal quarters, investors pay significantly lower multiples for Amgen's earnings. The article highlights that this pricing discrepancy does not reflect weaker performance, as Amgen has delivered superior profitability per sales dollar while maintaining robust top-line expansion. Amgen's financial strength is driven by a portfolio of six key medicines that collectively account for over 70% of product sales and grew 27% year-over-year in the third quarter of 2026. This growth effectively offsets declines in older blockbuster drugs like ENBREL, which saw sales fall 32.9%. Specific high-growth assets include Repatha, which generated $1.1 billion in quarterly revenue with a 37% increase, and EVENITY, which rose 39% to $751 million. Management has raised its full-year 2026 revenue guidance to a range of $38.9 billion to $39.7 billion, exceeding previous projections and indicating continued sales momentum. Operating margins have improved consistently over the past two years, climbing from 19.1% in late 2024 to 32.4% in the most recent period. While year-end spending is expected to rise, the company maintains a strong outlook for sustaining these margin levels into 2027. Despite its superior growth and margin profile relative to peers like Johnson & Johnson and AbbVie, Amgen's P/E ratio remains lower than that of J&J or AbbVie. The article suggests that the current market price does not fully reward the company's lead in profitability and revenue expansion. Investors are advised to watch the full-year 2026 results expected in February 2027 to confirm if management can meet its raised sales targets.