Review of Financial analysis: Amgen Inc. (NASDAQ: AMGN)

Health and Biotech

On FRIDAY, Amgen Inc. (NASDAQ: AMGN) ended the last transaction at $221.11, with a change of 1.43%. The daily volume was calculated at 2057707 shares. The company has a market worth of $132444.89M. The average true range of the stock is observed at 4.04 and the relative strength index of the stock is recorded at 77.8. It holds an average volume of 2823.02K shares. In 52-week session, the stock hit the peak level of 0.58% and touched to lowest level of 32.96%.

Amgen (AMGN) recently reported financial results for the third quarter of 2019. Key results include:

  • Total revenues reduced 3% to $5.7B in comparison to the third quarter of 2018, reflecting the impact of biosimilar and generic competition against key products.
  • GAAP earnings per share (EPS) increased 14% to $3.27 benefited by lower weighted-average shares outstanding and higher operating income.
  • Non-GAAP EPS reduced 1% to $3.66 as a result of lower revenue, offset partially by lower weighted-average shares outstanding.
  • The Company generated $3.2B of free cash flow in the third quarter of 2019 versus $3.1B in the third quarter of 2018.
  • 2019 total revenues guidance revised to $22.8-$23.0B; EPS guidance to $12.50-$12.80 on a GAAP basis and $14.20-$14.45 on a non-GAAP basis. This guidance excludes the impact of the Otezla® (apremilast) acquisition.
  • The Company expects the Otezla acquisition to close before the end of the fourth quarter.

Cash Flow and Balance Sheet

  • The Company generated $3.2B of free cash flow in the third quarter of 2019 versus $3.1B in the third quarter of 2018 driven primarily by favorable changes in working capital.
  • The Company’s third quarter 2019 dividend of $1.45 per share was reported on Aug. 2, 2019, and was paid on Sept. 6, 2019, to all stockholders of record as of Aug. 15, 2019, representing a 10% increase from 2018.
  • During the third quarter of 2019, the Company repurchased 6.2M shares of ordinary stock at a total cost of $1.2B. At the end of the third quarter, the Company had $3.6B remaining under its stock repurchase authorization.

2019 Guidance

For the full year 2019, the Company now expects:

  • Total revenues in the range of $22.8B to $23.0B.
  • On a GAAP basis, EPS in the range of $12.50 to $12.80 and a tax rate in the range of 13% to 14%.
  • On a non-GAAP basis, EPS in the range of $14.20 to $14.45 and a tax rate in the range of 14% to 15%.
  • Capital expenditures to be about $650M.
  • 2019 Guidance does not include the Otezla acquisition which is predictable to close by the end of the fourth quarter.

Third Quarter Product and Pipeline Update

The Company provided the following updates on selected product and pipeline programs:


  • In September, the Company reported that it joined a consortium to perform the whole genome sequencing of about 500,000 participants in the UK Biobank. deCODE Genetics, a wholly-owned subsidiary of Amgen, will provide the whole genome sequencing for the project, together with the Wellcome Sanger Institute.


  • A Phase 3 Study evaluating the efficacy and safety of tezepelumab in adults and adolescents with severe uncontrolled asthma has completed enrollment, with the primary analysis predictable in late 2020.
  • A Phase 2 study evaluating the efficacy and safety of tezepelumab in adults with moderate to very severe chronic obstructive pulmonary disease is enrolling patients.

Amgen Inc has PEG ratio of 2.14 and price to cash ratio of 6.35. The stock price increased at 6.43% from 20-Days Simple Moving Average, surged at 9.52% from 50-Days Simple Moving Average and settled at 17.16% from 200 Days Simple Moving Average. In the trailing 12 months period, return on assets ratio of the Company was 12.90% and return on equity ratio was 71.60% while its return on investment ratio was 19.80%.