Amgen stock price target raised to $326 by UBS on expected Q2 beat

UBS raised its price target on Amgen (AMGN) to $326, maintaining a Neutral rating, ahead of anticipated Q2 2025 earnings, citing strong growth in key products like Repatha and Evenity and the current lack of aggressive biosimilar pricing impact. While UBS cautions on potentially high consensus estimates for some drugs, Amgen also recently reported positive Phase 3 results for bemarituzumab and promising Phase 2 data for its obesity candidate MariTide, though a mixed MariTide readout prompted BMO Capital to lower its price target, indicating a nuanced pipeline outlook despite current product strength.

Analysis

Amgen (AMGN) presents a dual narrative of strong current commercial execution offset by a nuanced pipeline outlook, as reflected in UBS's price target increase to $326 while maintaining a Neutral rating. The company's immediate financial health is robust, underscored by 15.56% revenue growth over the last twelve months and impressive prescription trends, with key drivers Repatha and Evenity showing approximately 30% year-over-year TRx growth. A significant near-term positive is the observation that aggressive pricing from biosimilar competitors has not yet materialized, alleviating erosion concerns that previously tempered guidance. This operational strength is complemented by a solid capital return policy, evidenced by a 3.23% dividend yield and 14 consecutive years of dividend increases. However, forward-looking sentiment is mixed. While the Phase 3 success of gastric cancer drug bemarituzumab is a clear pipeline win, the company's high-profile obesity candidate, MariTide, received a mixed reception. Despite showing promising efficacy with up to 20% weight loss in a Phase 2 study, the readout prompted BMO Capital to lower its price target and peak sales estimates. This cautious stance is compounded by UBS's warning that consensus estimates for drugs like Tepezza, which saw a 9% Q1 volume decline, could be too high, and that revenue booking through distributor orders may not perfectly align with prescription data.

Key Decisions for Investors

• Investors should weigh Amgen's strong current cash flow from established products and consistent dividend growth against the significant uncertainty and binary outcomes associated with its long-term pipeline, particularly the MariTide obesity drug.
• Monitor upcoming data from the Phase 3 MARITIME program for MariTide, as its results will be a critical catalyst for the stock, given the divergent analyst opinions on its peak sales potential.
• Keep a close watch on pricing dynamics from biosimilar competitors, as the current lack of aggressive competition is a temporary tailwind that could reverse and pressure revenues for legacy products like Prolia.
• Consider the stock's defensive characteristics, such as its 3.23% dividend yield and 14-year growth streak, which may offer a degree of valuation support amid the pipeline-related volatility.