Amgen (NASDAQ:AMGN) traded higher Wednesday after the stock was upgraded from Market Perform to Outperform at Leerink Partners. Leerink also raised its price target from $267 to $318.
Analysts said they expect multiple expansions, given the accelerating pipeline news flow for oncology, obesity, and cardiovascular disease. They also expect upward pressure on EPS due to accretion from its $28 billion acquisition of Horizon Therapeutics (NASDAQ:HZNP). The deal was completed last week.
The analysts explained, “Our upgrade is both a multiple-expansion and earnings-upside call... Most major pipeline candidates have the potential to launch late-decade, and we increased our 2031E stand-alone AMGN pipeline rev from $14.3B to $19.3B and our stand-alone AMGN 8-yr rev CAGR (’23-’31E) from 3% to 5%."
They added, “We also expect upward pressure on both near- and long-term EPS due to accretion from the acquisition of HZNP, which closed on October 6. We created a new model tab including HZNP, which includes est. 8% accretion in 2024 and 15% in 2025.”
Shares of Amgen climbed 2.6% shortly after the upgrade was published.
Leerink’s $318 price target implies an upside of 17% from yesterday’s close.