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Amgen Inc. (XNAS:AMGN) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

AMGN

Name:

AMGEN INC. (XNAS:AMGN)

Sector:

1.97B

Industry:

Drug Manufacturers�General

CEO:

Mr. Robert Bradway

Total Employees:

24,200

Our Technological Advancement Rating

Our Rating:

A

Technological advancement compared to industry is 80.77% higher

ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AMGEN INC.(AMGN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�GENERAL INDUSTRY. DATE: 07/09/2022

Primary Targets/Price Insights

Previous Close ($) :

242.37

One Month Price Target:

$243.13

Six Month Price Target :

$246.93

Likely Price in One Year's Time:

Ticker:

$251.49

Likely Trading Range Today Under (Normal Volatility)
 

$241.69

Price Upper limit ($) :

$243.15

Price Lower limit ($) :

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Price, as per data analysis, isn't likely to fall below:

Today:

$233.63

                                                               This week:

$222.83

                                                        This month :

$203.3

Other Primary facts

Market Cap:

129.57B

Market Cap Classification:

Large Cap

Number of Shares

IPO Date:

534.93M

Best/Worst Daily Performance (Last 3+ Years)
 

Highest Daily Appreciation:

10.9%

-8.26%

Worst Daily Decline:

Our Options Trading Entry Points

Iron Condor entry points for options expiring in 1 week's time

Low risk (<2%) entry points

Buy Call:

Sell Call:

Buy Put:

Sell Put:

$282.92

$264.38

$201.82

$220.36

Medium risk (<10%) entry points

Buy Call

Sell Call

$258.34

Buy Put:

Sell Put:

$254.38

$226.35

$230.36

These entry points can be used for other strategies, such as butterflies, straddles, etc.

Risk-Adjusted returns (Sharpe Ratio) of

AMGN

Sharpe Ratio:

0.66%

Comparison:

AMGN, is amongst the top 60% stocks with highest risk-adjusted returns

Sharpe ratio is -66.13% lower than the industry

& is -70.88% lower than the market/S&P 500 average

Average Returns/Yield of

AMGN

Daily returns:

0.02%

Weekly returns:

0.10%

Monthly returns:

0.41%

Yearly returns:

11.30%

Comparison of returns:

Average annual returns/yield (last 3 years) is -56.34% below industry average

Classification:

AMGN, is amongst the top 60% highest yielding stocks in terms of daily returns

Results of T-Test of Returns:

0.68

Statistical test of Returns:

AMGN has yielded returns statistically similar to the market

SHARPE ratio explained.png

Volatility (measured by Standard Deviation)

Daily Volatility:

1.77%

Weekly Volatility:

3.95%

Monthly Volatility:

7.89%

Yearly Volatility:

27.35%

Volitlilty of last five days (Measured by Standard Deviation) 

Average Volatility of this Week:

1.43%

Volatility in last five trading days has been -18.84% below long-term volatility

Value at Risk Analysis (VaR)

Daily VaR:

-3.60%

Weekly VaR:

-8.06%

Monthly VaR:

-16.12%

How Much Can the price of

AMGN

Decline in a Recession?

Likely price decline in a recession: 

Base case (decline):

-14%

Worst case (decline):

-55.85%

This translates to price declining to:

$208.38

This translates to price declining to:

$107.02

Severe Crash Probability

Risk of crash in next 6/12 months: Medium (<50%)

What is Value at Risk (VaR)?

VaR explained figure

Risk Fundamentals

AMGN is a 13.78% riskier investment compared to the market/S&P 500 & is -2.52% less risky than Nasdaq(IXIC)

Risk (measured by volatility) is -6.98% below industry average

Overall, it is amongst the top 50% most risky stocks

Beta Examination of

AMGN

Beta in relation to market/S&P 500--0.56

Expected beta in 1 year's time:

0.515

Expected beta in 3 year's time:

0.728

Unlevered (debt free) Beta:

0.016

Beta in relation to Nasdaq (XNAS):

0.521

Beta in relation to all global stocks::

0.578

Beta Comparison & Analysis

Beta of competitors/peers::

0.694

Beta is -19.37% lower than peers

Average Industry Beta: 

0.492

Beta is 13.86% above industry average

Sustainable Growth Rate Analysis

Sustainable growth rate for this stock/firm:

22.15%

Sustainable growth rate is -68.51% below industry average

Alpha provided | Alpha Analysis 

Alpha provided:

-0.020

Alpha is -142.82% below industry average alpha yield

Alpha is -130% below the market average

Analysis of Cost of Capital of

AMGN

Equity cost of capital:

0.070

Equity cost of capital is 7.16% above industry mean WACC

Unlevered (without debt) cost of capital:  

0.20%

Before-tax cost of debt:

3.28%

After-tax cost of debt:

2.59%

Overall debt rating:

High AA grade (second highest grade)

Weighted average cost of capital (WACC):

2.59%

WACC is -13.13% below industry mean WACC

Key Per-Share Metrics & Analysis

Revenue per share:

$49.20

Revenue growth rate per share of (3Y):

141.54

Annual revenue growth rate is 1.31% above the industry average

EPS:

$10.16

Expected Annual growth rate of  EPS (3Y):

-7.43%

Expected future EPS growth rate is 307.77% higher than the Drug Manufacturers�General industry

Free cash flow (FCF) per share:

$15.22

Balance sheet equity growth per share: 29.07%

Equity growth rate per share is 25.54% higher than the industry

Debt per share

$67.32

EBITDA per share

$20.80

Valuation Analysis Today of

AMGN

P/E Ratio:

20.53

P/E Ratio of Competitors/Peers:

22.82

P/E ratio is -10.01% lower than main peers & is 13.52% higher than the industry

Stock price/value with industry average P/E ratio: $183.77

AMGN is 31.89% overvalued if valued using industry average P/E ratio

Share value as per dividend discount (DDM) model: $215.75

Present value of the expected future dividends only: $194.29

P/S (Price to Sales ratio):

4.93

Price to sales ratio is 32.64% above the industry mean

P/B (Price to book value ratio):

141.54

Price to free cash flow: 15.93

Price to free cash flow ratio is 67.77% higher than the industry

Net income growth rate (3Y):

-20.81%

Net income growth rate is -115.68% lower than the industry average net income growth rate

Dividend Analysis

Dividend payout rate: 18.87%

Dividend yeild: 3.05%

Previous Dividend: $1.94

Previous adjusted dividend: $1.94

Previous Dividend: $7.40

Expected next dividend best case: $2.07

Expected next dividend worst case: $1.81

Average dividend payment (long-term): $1.71

Average dividend increase/decrease (growth rate) % per period: 3.06%

Expected next dividend payment date: 09/06/2022

Expected next dividend record date: 15/08/2022

Expected next dividend declaration date: 31/05/2022

Previous dividend payment date: 06/08/2022

Previous dividend record date: 17/05/2022

Previous dividend declaration date: 03/02/2022

Dividend History:

2022-05-16--$1.94

2021-11-15--$1.76

2021-05-14--$1.76

2022-02-14--$1.94

2021-08-16--$1.76

2021-02-11--$1.76

Dividend growth rate is -59.29% lower than the industry average

In-depth Debt & Leverage Analysis

Debt to equity ratio:

3931.22%

Net debt to equity ratio:

3310.70%

Debt to assets ratio:

60.83%

Net debt to assets ratio:

51.23%

Debt-to-asset ratio is -10.67% below industry average

Ability to repay debt:

Interest coverage ratio:

9.22

Interest coverage ratio is -78.50% less than industry average

Looking forward:

Debt growth rate:

0.98%

Annual debt growth is -274% lower than industry average debt growth rate

Debt repayment rate in last quarter: 0.00%

Analysis of Key Statistics  

Correlation of price movement with the market:

0.6

Statistical significance of correlation:

AMGN has a statistically significant correlation with the market

Average Correlation of  the industry with the market:

0.517

Stock price is 16.02% more correlated with the market, compared to the industry average correlation

R Squared (percentage of price movement explained by movement of the market): 

0.517

Correlation of price movement with Nasdaq (^IXIC):

0.006

Covariance  of price movement with the market:

0.006

Kurtosis 

7.408

Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns

Skewness of returns:

0.665

Returns are right (positive) skewed; mean returns are greater than median and mode returns

Fundamental Analysis & Dupont Analysis of

AMGN

Gross Profit Margin Ratio:

301%

Operating Profit Margin Ratio:

30.44%

Operating profit margin is 40.19% higher than the industry

Net Profit Margin Ratio:

301%

Effective Tax Rate:

12.21%

Effective tax rate is 16.64% higher than the industry

Dupont Method

Net Profit Margin

Return on Equity Ratio (ROE):

×

ROA

=

×

624.78%

Return on equity (ROE) is 522.42% higher than the industry

Financial Leverage

Asset Turnover Ratio (ROA):

9.67%

Return on assets (ROA) is -6.94% lower than the industry

Financial Leverage:

2.6x

Current Ratio:

1.44

Current ratio is 2.03% above industry average

Cash Conversion Cycle (days):

48.5

Cash conversion cycle is -51.18% below industry average

The remaining useful life of property plant & equipment is: 13.8 years

Stock based compensation to net income ratio:

-

In-depth Efficiency  Analysis

Revenue generated per employee:

1.1M

Each employee generates -4% less revenue than industry average revenue per employee

EBITDA generated per employee: 

459.7K

Each employee generates 17% more EBITDA than industry average revenue per employee

Profit generated per employee: 

236.5K

Each employee generates 7% more net income/profit than industry average revenue per employee

Free cash flow (FCF) generated per employee: 

81.6K

Each employee generates 18% more free cash flow than industry average revenue per employee

Assets/Capital per employee

1.7M

Each employee generates 18% more free cash flow than industry average revenue per employee

Research & Development (R&D) Analysis

Research & development (R&D) investment growth rate-- 14.55%

Growth rate in R&D investment/expenditure is -37.18% lower than the industry

Competitors/Peer firms of 

AMGN

Sanofi SA (XNAS:SNY)

INTUITIVE SURGICAL, INC. (XNAS:ISRG)

GILEAD SCIENCES, INC. (XNAS:GILD)

REGENERON PHARMACEUTICALS, INC. (XNAS:REGN)

ILLUMINA, INC. (XNAS:ILMN)

VERTEX PHARMACEUTICALS INCORPORATED (XNAS:VRTX)

BioNTech SE (XNAS:BNTX)

IDEXX LABORATORIES, INC. (XNAS:IDXX)

WALGREENS BOOTS ALLIANCE, INC. (XNAS:WBA)

Current Analyst Ratings

Strong buy�13%

Buy�29%

Hold�63%

Sell�0%

Strong sell�0%

Overall analyst sentiment is: Hold

Income Statement

Period:

TTM

Date:

3/31/22

Revenue:

26.32B

Cost of Revenue:

Gross Profit:

R&D Expense

General & Admin Expenses:

Selling, General & Admin Expenses

Sales and Marketing Expenses

Other Expenses :

Operating Expenses :

Cost & Expenses :

Interest Income:

Interest Expenses:

Depreciation & Amortization:

EBITDA:

Operating Income:

Other Income Expenses:

Income Before Tax:

Income Tax Expense:

Net Income:

Balance Sheet

Date:

Calendar Year:

Period:

Cash & Cash Equivalents:

Short Term Investments:

Cash & Short Term Investments:

Net Receivables:

Inventory:

Other Current Assets:

Total Current Assets:

PP&E:

Goodwill: 

Intangible Assets: 

Long Term Investments: 

Tax Assets: 

Other Non-Current Assets: 

Total Non-Current Assets: 

Other Assets: 

Total Assets: 

Accounts Payable: 

Short Term Debt:

Tax Payables:

Deferred Revenue:

Other Current Liabilities:

Total Current Liabilities:

Long Term Debt:

Other Non-Current Liabilities:

Total Non Current Liabilities:

Other Liabilities:

Total Liabilities:

Common Stock:

Retained Earnings:

Accumulated Other Comprehensive Loss:

Other Total Stockholders' Equity:

Total Stockholders' Equity:

Total Liabilities and Stockholders' Equity:

Total Investments:

Total Debt:

Net Debt:

6.53B

19.79B

4.81B

-

5.34B

-

123.00M

10.28B

-

1.21B

3.40B

11.12B

8.01B

5.72B

6.52B

796.00M

5.72B

Statement of Cash Flow

Date:

Period:

841.00M

Differed Income Tax :

- 251000.00K

Stock Based Compensation :

-

Change in Working Capital :

- 447000.00K

Accounts Receivables:

- 195000.00K

Other Working Capital:

-

Other Non-Cash Items:

545.00M

Net Cash Provided by Operating Activities:

2.16B

Investments in PP&E:

- 190000.00K

Net Acquisitions:

-

Purchases of Investments:

-

Sales/Maturities of Investments:

Other Investing Activities:

​Net Cash Used for Investing Activities:

Debt Repayment:

Common Stock Issued:

Common Stock Repurchased:

Dividend Paid:

Other Financing Activities:

Net Cash Used Provided by Financing Activities:

Effect of FOREX on Changes in Cash:

Net Changes in Cash:

Cash at End of Period:

Cash at Beginning of Period:

Operating Cash Flow:

Capital Expenditure:

Free Cash Flow (FCF):

3/31/22

2022

Q1

6.53B

16.00M

6.54B

5.08B