Amgen Inc. (AMGN): what the price assumes
In the published model solve dated 2026-Q2, anchored at $430.31, Amgen Inc. (AMGN) is priced for +5.0% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/AMGN
Headline
| Field | Value |
|---|---|
| Ticker | AMGN |
| Company | Amgen Inc. |
| Sector / Industry | Healthcare |
| Current price | $430.31/sh |
| Composition | Prolia 12% / Repatha 8% / Otezla 6% / ENBREL 6% / EVENITY 6% / XGEVA 6% / TEPEZZA 5% / BLINCYTO 4% / Nplate 4% / TEZSPIRE 4% / KYPROLIS 4% / Aranesp 4% / KRYSTEXXA 4% / Vectibix 3% / Other products 20% / Other revenues 4% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 7.6% |
| Operating margin today | 30.0% |
| Margin compression (value-band) | -22.4pp |
| Implied growth | 5.0% |
| Multiple paid | 22x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 7.4% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.06σ |
| cohort percentile (of 115 peers) | 45 |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.97x | 4 | expensive |
| Earnings | 3.80x | 3 | expensive |
| Relative | 1.07x | 2 | expensive |
| Growth | — | 0 | — |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.
Per-Model Detail (n=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $571.86 | 0.75x | no | FCF base $10.9B, growth 9% (input: historical growth), terminal g 4.0%, WACC 7.5%, 6yr projection |
| DCF Exit Multiple | Growth | $497.37 | 0.87x | no | Exit EV/EBITDA: 15.2x / 17.2x / 19.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $408.14 | 1.05x | yes | P/E 24x (static sector reference · 2026-04), scenarios: 19.9x / 24.0x / 28.1x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $174.83 | 2.46x | yes | BV/sh $21.62, ROE (TTM) 74.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $790.35 | 0.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $362.31 | 1.19x | no | Rev $38.1B, growth 9% (input: historical growth; tapered), Terminal P/S: 5.1x / 6.1x / 7.1x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $563.15 | 0.76x | no | EPS $16.09, growth 35% (input: historical EPS growth), PEG=0.76 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $103.04 | 4.18x | no | Normalized EBIT (5y avg op income, one-time charges added back) $9.20B × (1−14%) / WACC 7.5% → EPV (no growth) |
| Residual Income | Asset | $291.08 | 1.48x | yes | BV $21.62 + 5yr PV of (ROE (TTM) 74.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $88.47 | 4.86x | yes | √(22.5 × EPS $16.09 × BVPS $21.62) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $392.92 | 1.10x | yes | EBITDA $16.32B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $113.27 | 3.80x | yes | FCF $10175.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $103.44 | 4.16x | yes | SBC-adj FCF $9.68B (FCF $10.18B − SBC $0.49B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $519.17 | 0.83x | yes | EPS $16.09 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $14.42 | 29.84x | yes | BV $21.62 × (ROIC 5.0% / WACC 7.5%) (excluded from median) |
| P/Sales Sector | Relative | $281.86 | 1.53x | no | Revenue $38.09B × sector P/S 4.0x |
| PEG Fair Value | Relative | $603.38 | 0.71x | no | EPS $16.09 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $173.95 | 2.47x | no | EPS $16.09 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Amgen (consolidated) | operating | enterprise | 36.8B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $43.3b |
| Net debt / NOPAT (after-tax) | 4.42x |
| Net debt / operating income (pre-tax) | 3.79x |
| Interest coverage | 4.3x |
| Share count CAGR (dilution) | 0.3% |
| Burning cash | no |
Bullet Takeaways
- No single medicine carries this company: the largest branded product, Prolia, is about 12% of revenue, Repatha about 8%, and roughly a fifth of the total comes from an aggregate of smaller products, which is both the defence against any one patent cliff and the reason no one product can offset the others.
- The specific risk is already dated: the RANKL patents behind XGEVA "expired in February 2025 in the United States and in November 2025 in select countries in Europe", and the company says that for 2026 it expects "accelerated sales erosion".
- Full-year 2026 revenue guidance was raised to a range of $37.1 billion to $38.5 billion, and the June-quarter report is due at the start of August.
Bull Case
Look at what this management team did with the money and the strategy becomes legible. Amgen borrowed heavily to buy Horizon Therapeutics, then spent the following years paying that borrowing down rather than repurchasing stock. The share count has been essentially flat over the past four years, drifting lower by about 0.3% a year, so almost none of the per-share result has come from financial engineering. Capital return has run through the dividend instead, and it has been raised on a schedule: increases of 6% in both 2025 and 2024, followed by a December 2025 declaration of "a cash dividend of $2.52 per share of common stock for the first quarter of 2026, an increase of 6% over the same period in the prior year". A company retiring borrowings and raising the dividend at the same rate every year is telling you it believes the cash flow is durable.
What the borrowing bought has an unusual property. The 10-K states plainly that "TEPEZZA and KRYSTEXXA currently do not face any direct competitors in the United States, Europe or Japan." Rare-disease medicines with no direct competitor in the three largest developed markets are not priced by a market; they are priced by payers and reimbursement policy. That is a slower and more predictable erosion curve than a biosimilar entering against a large primary-care brand, and it is the specific asset the leverage was taken on to acquire.
The growth engine underneath is more concentrated than the sixteen-line revenue table suggests, and it is working. Six products the company identifies as its key growth drivers accounted for about 70% of sales in the first quarter of 2026 and grew 24% year over year, which is what lifted total revenue 6% despite the products going the other way. That is the arithmetic of a portfolio in transition: the new products have to grow several times faster than the old ones shrink simply to hold the line, and in the most recent quarter they did rather better than hold it.
Profitability is competitive without being exceptional, which suits a company at this stage. Amgen converts about 25.4% of roughly $37.2 billion of revenue into operating profit. AbbVie (ABBV) runs 24.4% on a larger base with 9.5% growth, Gilead (GILD) manages 34.9% with 3.5% growth, and BioNTech (BNTX) 39.7%. Among the larger diversified names, Bristol-Myers (BMY) grew 1.8% and Pfizer (PFE) 1.4% over the year, which is the relevant comparison: Amgen's problem is the same as theirs, and its portfolio breadth means no single expiry decides the outcome. The company describes the task without euphemism, saying it must "grow sales from existing and new products to achieve revenue growth and to offset revenue losses caused by products' loss of their exclusivity". That is the whole job, stated by the people doing it.
Bear Case
Every medicine here is a lease, not a freehold. The patent office sets the expiry date, a biosimilar manufacturer shows up on schedule, and a product that took a decade to build loses most of its economics in a few years. Amgen is already inside that cycle rather than approaching it. The RANKL patents covering XGEVA "expired in February 2025 in the United States and in November 2025 in select countries in Europe", and for 2026 the company itself expects "accelerated sales erosion". The filing goes further, noting that it faces biosimilar and generic competition "in most of the territories in which we operate, including the United States and Europe, and we expect to face increasing biosimilar and/or generics competition this year". That is not a risk factor about the future. It is a description of the present.
Distribution adds a second concentration on top of the product one. In 2025 the company had product sales to three customers that each exceeded 10% of total revenues, and "on a combined basis, these customers accounted for 77 % of total gross revenues". Three counterparties standing between a portfolio of medicines and the patients who take them is enormous negotiating leverage on the other side of the table, and it is exercised on net selling price rather than on volume, which is precisely the line item a portfolio in transition cannot afford to give ground on.
Now the arithmetic. At $376.03 the shares carry about 24 times company-wide operating profit, which resolves into a requirement for operating profit to grow around 7% a year over a five-year stage. That is essentially the pace the company has recently delivered, so the demand is not outlandish. What is uncomfortable is how little slack sits behind it. A single percentage point added to the cost of capital moves the growth the arithmetic needs by more than eight points. A business whose products are contractually time-limited, and which therefore has a genuinely long-dated cash-flow profile, is one of the most rate-sensitive things in the equity market, and that sensitivity is invisible in the current numbers.
The methods split along a revealing line. The peer-multiple and forward-growth approaches reach today's level. The approaches that capitalize what the business currently produces do not come close: the price sits roughly 4.9 times where the earnings-power methods land and about 1.9 times where the asset-based methods land. Some of that is structural rather than damning, because a zero-growth capitalization of a pharmaceutical company will always look punitive against a firm whose entire model is replacement. But it does mean the current level requires the replacement machine to keep working. There is no version of this price that survives the pipeline disappointing.
The balance sheet limits the response if it does. Net debt of about $45.3 billion sits near 5.0 times trailing operating profit, and operating profit covers the interest bill about 3.3 times. That is serviceable and it is also constraining: the company that answered its last patent problem by buying Horizon has considerably less room to answer the next one the same way. Deleveraging and dividend growth are both real uses of the money, and every dollar going to them is a dollar not available for the acquisition that replaces the next expiry.
Valuation
Take the price as given and work out what it has already agreed to. At $376.03 the company is valued at about 24 times its trailing operating profit, and inverting that gives a requirement for operating profit to compound around 7% a year across a five-year stage. Set against its own record, that is roughly the pace it has been running, which is why the assumption reads as within range rather than demanding. The interesting number is not the growth rate but the sensitivity behind it: shift the cost of capital by a single point and the growth the arithmetic requires moves by more than eight points. Long-dated cash flows do that.
The methods divide into two camps and the reason is worth understanding rather than reciting. The peer-multiple approaches land essentially at today's level, and the forward-growth approaches sit just above it. The approaches anchored on current earning power land far below: the price sits roughly 4.9 times where those methods settle, and about double where the asset-based methods land. A zero-growth capitalization of trailing free cash flow is a structurally hostile lens for a pharmaceutical company, because it prices the existing products to run off and credits nothing for the ones replacing them. That is a real limitation of the lens, not a verdict on the company. The asset-based approaches are similarly awkward here: book value is only about $16.89 a share after years of buybacks and acquisition accounting, and the resulting return on equity of about 84.9% describes a small denominator far more than it describes extraordinary economics.
Against its cohort the position is unremarkable in a useful way. Amgen turns about 25.4% of roughly $37.2 billion of revenue into operating profit. AbbVie (ABBV) runs 24.4% and grew 9.5%; Gilead (GILD) runs 34.9% and grew 3.5%; BioNTech (BNTX) runs 39.7% with much faster growth off a smaller base. Bristol-Myers (BMY) and Pfizer (PFE) both grew under 2% over the year, and Biogen (BIIB) about 1.2%. This is a group where a mid-single-digit growth rate is a good outcome, and the multiple the market is applying assumes Amgen lands nearer the top of that range than the bottom.
Leverage is where the downside gets bounded, and it is the least flattering part of the file. Net debt of about $45.3 billion runs near 5.0 times trailing operating profit, with the interest bill covered around 3.3 times. Operations generate a great deal of money and the share count has been flat, so the capacity to service and repay is not in doubt. What is constrained is optionality: the balance sheet that funded the Horizon acquisition is carrying that decision for several more years, and the medicines it bought are now the ones being counted on. Guidance has been raised four times and reaffirmed ten times since 2006, which is a record of accuracy rather than ambition, and accuracy is what a company in the replacement business is actually selling.
Catalysts
The most recent quarter reframed the year. Reporting on April 30, 2026, Amgen posted total revenues of $8.6 billion, up 6% year over year, and raised full-year 2026 revenue guidance to a range of $37.1 billion to $38.5 billion from $37.0 billion to $38.4 billion. Inside that, the six products management identifies as its key growth drivers produced about 70% of sales and grew 24%. The June-quarter report follows at the start of August, and the number that matters in it is the same one: whether the growth products are still outrunning the products going off patent by enough of a margin.
MariTide is the pipeline event that would change the shape of the company rather than the year. Phase 2 obesity results presented at the American Diabetes Association meeting showed average weight loss of up to about 20% in people with obesity and no type 2 diabetes, against 2.6% on placebo, and up to about 17% in people with obesity and type 2 diabetes against 1.4%, with weight loss not yet plateaued at 52 weeks. Three Phase 3 studies in type 2 diabetes are being initiated during 2026, alongside a Phase 2b study measuring liver fat reduction. A monthly dosing schedule is the differentiating claim, and it is the one Phase 3 has to substantiate.
Against those, the erosion side of the ledger runs on its own timetable. The company has told the market to expect accelerated sales erosion during 2026 following the XGEVA patent expiries, and it expects increasing biosimilar and generic competition across most of the territories where it operates. Neither of those requires an announcement to happen; they simply show up in the quarterly product table. Watching the growth drivers alone will overstate the health of the business, and watching the declining products alone will understate it. The gap between the two is the whole story for the next several quarters.
Peer Cohorts (Per Segment, With Filing Citations)
Amgen (consolidated) (reported)
- BIIB (BIOGEN INC.)
- FY2025 10-K: …and forward currency options designated as hedging instruments in our consolidated statements of income: For the Years Ended December 31, Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions) Net Gains/(Losses) Excluded from Effectiveness Testing and Recognized in Operating Income (in…
- FY2025 10-K: …please read Note 19, Collaborative and Other Relationships , to these consolidated financial statements. Consolidation Our consolidated financial statements reflect our financial statements, those of our wholly owned subsidiaries and variable interest entities where we are the primary beneficiary. For consolidated…
- GILD (GILEAD SCIENCES, INC.)
- FY2025 10-K: …payment term. We may terminate the agreement without cause with respect to the countries where we sell the products. Symtuza In 2014, we amended a license and collaboration agreement with Janssen to develop and commercialize a fixed-dose combination of Janssen's darunavir and our cobicistat, emtricitabine and…
- FY2025 10-K: …and Odefsey worldwide, but retained rights to distribute both combination products in certain countries outside of the U.S. Neither party is restricted from combining its drugs with any other drug products except those which are similar to the components of Complera/Eviplera and Odefsey. We are responsible for…
- BNTX (BioNTech SE)
- FY2025 20-F: …arithmetic aggregations of the figures that preceded them and figures presented in the explanatory notes may not add up to the rounded arithmetic aggregations. Rounding applied may differ from rounding published in different units in the previous years. Segment Information Decisions with respect to business…
- FY2025 20-F: % BioNTech Pharmaceuticals Asia Pacific Pte. Ltd. Singapore Singapore 100 % 100 % BioNTech Pharmaceuticals Spain S.L Spain Barcelona 100 % 100 % BioNTech Switzerland GmbH Switzerland Basel 100 % 100 % CureVac Swiss AG Switzerland Basel 86.75 % (2) n / a (1) InstaDeep Tunisia SARL Tunisia Tunis 100 % 100 % BioNTech…
- BMY (Bristol-Myers Squibb Company)
- FY2025 10-K: …discounts and rebates. U.S. GTN adjustments percentage increased primarily due to the redesign of the U.S. Medicare Part D program and higher government channel mix, which has higher GTN adjustment percentages. 47 Total Revenues by Product: Year Ended December 31, Dollars in millions 2025 2024 % Change Growth…
- FY2025 10-K: …aGVHD acute graft-versus-host disease MS Multiple Sclerosis Amgen Amgen Inc. MSI-High microsatellite instability-high AML acute myeloid leukemia MyoKardia MyoKardia, Inc. Amylin Amylin Pharmaceuticals, Inc. MZL marginal zone lymphoma ANDA abbreviated New Drug Application NAV net asset value ASC Accounting Standards…
- ABBV (AbbVie Inc.)
- FY2025 10-K: …have co-exclusive rights to commercialize the products; however, AbbVie is the principal in the end-customer product sales. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Sales of Imbruvica are included in AbbVie's net revenues. Janssen's share of profits is…
- FY2025 10-K: …ImmunoGen were $ 578 million and operating losses attributable to ImmunoGen were $ 682 million, inclusive of $ 349 million of cash-settled, post-closing expense for ImmunoGen employee incentive awards, $ 179 million of inventory fair value step-up amortization and $ 157 million of intangible asset amortization.…
- LLY (ELI LILLY & Co)
- FY2025 10-K: ; Novartis AG; Pfizer Inc.; Roche Holding AG; Sanofi S.A.; and Stryker Corporation. (2) Prior to 2025, the peer group we used as the industry index for this graph was comprised of the following companies in the pharmaceutical and biotechnology industries: AbbVie Inc.; Amgen Inc.; AstraZeneca PLC; Biogen Inc.;…
- FY2025 10-K: …in combination with endocrine therapy for treatment of HR+, HER2-, node positive, early breast cancer at high risk of recurrence. 6 Therapeutic area Products Certain Indications Immunology products Ebglyss For the treatment of adult and adolescent patients 12 years or older with moderate to severe atopic dermatitis…
- PFE (Pfizer Inc.)
- FY2025 10-K: …assets, net, consisting of IPR&D, (ii) $ 2.2 billion of Goodwill, (iii) $ 1.7 billion of net deferred tax liabilities, and (iv) $ 635 million of contingent consideration liability assumed from Metsera. Goodwill resulted primarily from the recognition of deferred tax liabilities, is related to our Biopharma segment…
- FY2025 10-K: Cash Flows • Notes to Consolidated Financial Statements Pfizer Inc. 2025 Form 10-K 107 15(a)(2) Financial Statement Schedules. Schedules are omitted because they are not required or because the information is provided elsewhere in the financial statements. The financial statements of unconsolidated subsidiaries are…
- JNJ (Johnson & Johnson)
- FY2025 10-K: …by ZYTIGA (abiraterone acetate) due to loss of exclusivity and IMBRUVICA (ibrutinib) due to competitive pressures and the impact of Medicare Part D redesign. Immunology products sales were $15.7 billion in 2025, a decline of 11.8% as compared to the prior year primarily due to the decline of STELARA (ustekinumab)…
- FY2025 10-K: …to property, plant and equipment is contained in Note 17 Segments of business and geographic areas of the Notes to Consolidated Financial Statements included in Item 8 of this Report. Item 3. Legal proceedings The information called for by this item is incorporated herein by reference to the information set forth in…
Article Insight (Recent News Sentiment)
Sentiment score: 42.00 (MEDIUM confidence) FUD/Hype: FUD_DETECTED (Guggenheim’s price target cut and emphasis on biosimilar competition and obesity market challenges introduce a cautious tone.) Claim alignment: MIXED
These articles collectively signal moderate caution regarding Amgen’s near-term prospects, primarily driven by competitive pressures and pipeline execution risk.
247wallst.com & theglobeandmail.com (combined)
- Scope: Analyst revisions following Q1 2026 earnings, focusing on price targets and growth concerns.
- Data: Guggenheim lowered PT to $340; consensus PT is $353.43, a 9.3% upside.
- Verdict: Challenges the thesis by highlighting analyst skepticism, but doesn’t invalidate core cash flow argument.
blockonomi.com
- Scope: Details Amgen’s $300M investment in its Puerto Rico manufacturing facility.
- Data: Total U.S. manufacturing investment now exceeds $3.65 billion over the past year.
- Verdict: Validates the capital allocation strategy outlined in the report, supporting future margin expansion.
theglobeandmail.com (second instance)
- Scope: Additional analyst commentary on Amgen, Phathom, and Zimmer Biomet.
- Data: Citi maintains a Hold rating with a $345 target; average analyst target is $364.35.
- Verdict: Irrelevant to the core thesis; reiterates existing analyst sentiment.
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Amgen first-quarter 2026 results, April 30, 2026 · Amgen first-quarter 2026 results and slides, April 30, 2026 · Amgen MariTide Phase 2 results, American Diabetes Association 85th Scientific Sessions, June 2025 · Amgen clinical development update, 2026