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

Amgen (AMGN) is highlighted as a compelling growth stock, despite its Zacks #3 (Hold) rank, due to its strong underlying metrics. The biotechnology firm boasts a top-tier VGM Score of A and a Growth Style Score of B, forecasting 4.9% year-over-year earnings growth for the current fiscal year. This outlook is reinforced by 14 analyst upward revisions to the fiscal 2025 earnings estimate, raising the consensus to $20.82 per share, and an impressive 8.3% average earnings surprise, positioning AMGN as a strong candidate for growth-oriented portfolios.

Analysis

Amgen (AMGN) presents a nuanced investment profile, characterized by a neutral Zacks #3 (Hold) rating that contrasts with several positive underlying fundamentals. While the formal rating suggests a wait-and-see approach, the company's 'A' grade for overall VGM (Value, Growth, Momentum) and 'B' for Growth indicate strong potential. This is substantiated by a forecast for 4.9% year-over-year earnings growth for the current fiscal year and a consistent history of outperformance, evidenced by an 8.3% average earnings surprise. Critically, forward-looking sentiment appears bullish, with 14 analysts revising fiscal 2025 earnings estimates upward over the last 60 days, lifting the consensus estimate by $0.25 to $20.82 per share. This positive earnings outlook helps to counterbalance the stated headwinds from biosimilar competition impacting legacy drugs, suggesting that the growth from newer products is effectively mitigating these pressures.

Key Decisions for Investors

• Investors should look beyond the neutral Zacks #3 'Hold' rating and focus on the strong underlying signals, including the positive earnings estimate revisions for fiscal 2025 and a history of significant earnings surprises.
• The primary dynamic to monitor is the balance between declining sales from legacy products facing competition and the growth momentum of its newer drug portfolio, which is the key driver of the positive outlook.
• Given the favorable growth metrics and upward analyst revisions, growth-focused investors could consider AMGN a candidate for their watchlist, potentially viewing the current 'Hold' rating as an entry point ahead of any future upgrades.