Amgen, Inc. (AMGN) — This is one of the world’s leading biotechnology companies with major treatments for anemia, neutropenia, forms of arthritis, psoriasis, cancer and osteoporosis.
On Friday, AMGN stock closed nearly 3% higher after the company reported second-quarter earnings of $2.57 per share, beating analysts’ estimates by a wide margin. The Zacks consensus estimate was for $2.43 per share. Revenue of $5.4 billion, up 4% year over year, also came in above estimates.
Amgen raised its guidance for the full year. Management now expects to earn $9.55 to $9.80 per share on sales of $21.1 billion to $21.4 billion.
Capital IQ recently reiterated its “buy” rating on AMGN stock and 12-month price target of $202. Its analysts note that Amgen has a strong pipeline with 16 compounds in Phase III trials that could accelerate growth. They estimate adjusted EPS of $9.77 in 2015, helped by the reinitiation of share buybacks, and $10.64 in 2016.
Despite the company’s outstanding record of growth, AMGN stock has traded in a relatively narrow range of about $150 to $170 since March. However, shares broke through resistance last week and jumped to an intraday high of $181.81 on Friday before succumbing to profit-taking.
The breakout resulted in a trading gap from $172 to $176 and was assisted by very high buy-side volume and strong technical support from all three major moving averages.
Last week’s volume was the highest of the year. However, the volatile condition now present is likely to result in profit-taking that could close the open gap. Therefore, my buy under price for AMGN stock is $171.
The trading target is $210 in three months, which would result in a gain of nearly 23%. The company also pays an annual dividend of $3.16 per share for a current yield of 1.8%.
