Why Amgen (AMGN) Outperformed Amid Market Declines

In the latest trading session, Amgen (AMGN) closed at $318.65, marking an increase of +0.47% from the previous day's close. This performance was notable as it outshined the S&P 500, which experienced a daily loss of 1.07%. Similarly, the Dow Jones Industrial Average fell by 0.62%, while the tech-heavy Nasdaq composite saw a dip of 1.71%.

Amgen, recognized as the world's largest biotech drugmaker, has gained 8.93% over the past month. This rise stands in contrast to the Medical sector's modest growth of 0.53% and the S&P 500's substantial loss of 7.03% during the same period.

Looking ahead, investors and analysts are keenly awaiting Amgen's upcoming earnings report. Expectations are set for Amgen to announce earnings of $4.18 per share, reflecting a year-over-year growth of 5.56%. Furthermore, the consensus forecast for revenue stands at $8.01 billion, indicating an increase of 7.52% from the same quarter last year.

For the full fiscal year, Zacks Consensus Estimates predict earnings will reach $20.63 per share and total revenues will amount to $35 billion, showing growth of +3.98% and +4.72%, respectively, compared to the previous year.

Investors should also consider updates to Amgen's analyst estimates as they can significantly affect stock valuation. Recent positive revisions of estimates often reflect analysts' confidence in the company's performance and prospects for profitability.

Historical data suggests that these estimate changes are closely tied to future stock price movements. To quantify this relationship, the Zacks Rank was developed, providing a rating system that incorporates estimate changes. The system ranges from #1 (Strong Buy) to #5 (Strong Sell), with a strong track record of outperforming the market; stocks ranked #1 have yielded an average annual return of +25% since 1988. In the past month, the consensus EPS projection for Amgen increased by 0.14%, and the stock currently holds a Zacks Rank of #3 (Hold).

In terms of valuation, Amgen trades with a Forward P/E ratio of 15.37, which is lower than the industry average Forward P/E of 20.29.

Additionally, Amgen's PEG ratio currently stands at 2.64. This ratio is similar to the widely-followed P/E ratio but also accounts for expected earnings growth. For comparison, the Medical - Biomedical and Genetics industry had an average PEG ratio of 1.56 at the end of trading yesterday.

The Medical - Biomedical and Genetics industry forms part of the broader Medical sector and is ranked 70th by Zacks Industry Rank, placing it within the top 28% of over 250 industries.
This industry rank evaluates the strength of various industry groups based on the average Zacks Rank of their constituent stocks. Research indicates that stocks within the top half of rated industries typically outpace those in the bottom half by a factor of two to one.

Investors are encouraged to utilize stock-tracking tools and metrics to navigate upcoming trading sessions effectively.

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