Here's Why Amgen (AMGN) is a Strong Momentum Stock

Zacks Investment Research highlights Amgen (AMGN) as a strong momentum stock, noting its 'A' Momentum Style Score and 8.5% share price increase over the past four weeks. Twelve analysts have revised fiscal year 2025 earnings estimates upwards in the last 60 days, increasing the Zacks Consensus Estimate to $20.82 per share, and the company boasts an average earnings surprise of 8.3%. Despite a Zacks Rank of #3 (Hold), Amgen's top-tier Momentum and VGM Style Scores suggest it warrants consideration for momentum investors.

Analysis

Amgen (AMGN) currently holds a Zacks Rank #3 (Hold) but exhibits strong momentum characteristics, as indicated by its 'A' VGM Score and 'A' Momentum Style Score. This is supported by an 8.5% increase in its share price over the past four weeks. Analyst sentiment for fiscal 2025 appears positive, with twelve upward earnings estimate revisions in the last 60 days, leading to a $0.18 increase in the Zacks Consensus Estimate to $20.82 per share. Furthermore, Amgen has demonstrated a consistent ability to outperform expectations, boasting an average earnings surprise of 8.3%. The company, a significant player in the biotech industry with a diverse portfolio spanning oncology, cardiovascular disease, and inflammation, faces ongoing challenges from biosimilar and branded competition affecting its older drugs like Epogen, Neupogen, and Enbrel. However, this pressure is being partially offset by growth from newer products such as Prolia and Xgeva, alongside a pipeline of other drugs and biosimilars.

Key Decisions for Investors

• Investors with a momentum-driven strategy should consider Amgen due to its strong Momentum Style Score, recent share price appreciation, and positive analyst earnings revisions for FY2025.
• Despite the Zacks #3 (Hold) rating, the 'A' VGM score suggests a favorable combination of value, growth, and momentum, warranting a closer look for potential inclusion in diversified portfolios.
• Monitor the sales trajectory of Amgen's growth drugs versus the declining sales of its legacy products, as this dynamic is crucial to sustaining earnings momentum and future stock performance.