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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Amgen Inc. (XNAS:AMGN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AMGN
Name:
AMGEN INC. (XNAS:AMGN)
Sector:
1.97B
Industry:
Drug Manufacturers�General
CEO:
Mr. Robert Bradway
Total Employees:
24,200
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 80.77% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AMGEN INC.(AMGN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�GENERAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
242.37
One Month Price Target:
$243.13
Six Month Price Target :
$246.93
Likely Price in One Year's Time:
Ticker:
$251.49
Likely Trading Range Today Under (Normal Volatility)
$241.69
Price Upper limit ($) :
$243.15
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$233.63
This week:
$222.83
This month :
$203.3
Other Primary facts
Market Cap:
129.57B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
534.93M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.9%
-8.26%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$282.92
$264.38
$201.82
$220.36
Medium risk (<10%) entry points
Buy Call
Sell Call
$258.34
Buy Put:
Sell Put:
$254.38
$226.35
$230.36
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AMGN
Sharpe Ratio:
0.66%
Comparison:
AMGN, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -66.13% lower than the industry
& is -70.88% lower than the market/S&P 500 average
Average Returns/Yield of
AMGN
Daily returns:
0.02%
Weekly returns:
0.10%
Monthly returns:
0.41%
Yearly returns:
11.30%
Comparison of returns:
Average annual returns/yield (last 3 years) is -56.34% below industry average
Classification:
AMGN, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.68
Statistical test of Returns:
AMGN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.77%
Weekly Volatility:
3.95%
Monthly Volatility:
7.89%
Yearly Volatility:
27.35%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.43%
Volatility in last five trading days has been -18.84% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.60%
Weekly VaR:
-8.06%
Monthly VaR:
-16.12%
How Much Can the price of
AMGN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-14%
Worst case (decline):
-55.85%
This translates to price declining to:
$208.38
This translates to price declining to:
$107.02
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
AMGN is a 13.78% riskier investment compared to the market/S&P 500 & is -2.52% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -6.98% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AMGN
Beta in relation to market/S&P 500--0.56
Expected beta in 1 year's time:
0.515
Expected beta in 3 year's time:
0.728
Unlevered (debt free) Beta:
0.016
Beta in relation to Nasdaq (XNAS):
0.521
Beta in relation to all global stocks::
0.578
Beta Comparison & Analysis
Beta of competitors/peers::
0.694
Beta is -19.37% lower than peers
Average Industry Beta:
0.492
Beta is 13.86% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
22.15%
Sustainable growth rate is -68.51% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.020
Alpha is -142.82% below industry average alpha yield
Alpha is -130% below the market average
Analysis of Cost of Capital of
AMGN
Equity cost of capital:
0.070
Equity cost of capital is 7.16% above industry mean WACC
Unlevered (without debt) cost of capital:
0.20%
Before-tax cost of debt:
3.28%
After-tax cost of debt:
2.59%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.59%
WACC is -13.13% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$49.20
Revenue growth rate per share of (3Y):
141.54
Annual revenue growth rate is 1.31% above the industry average
EPS:
$10.16
Expected Annual growth rate of EPS (3Y):
-7.43%
Expected future EPS growth rate is 307.77% higher than the Drug Manufacturers�General industry
Free cash flow (FCF) per share:
$15.22
Balance sheet equity growth per share: 29.07%
Equity growth rate per share is 25.54% higher than the industry
Debt per share
$67.32
EBITDA per share
$20.80
Valuation Analysis Today of
AMGN
P/E Ratio:
20.53
P/E Ratio of Competitors/Peers:
22.82
P/E ratio is -10.01% lower than main peers & is 13.52% higher than the industry
Stock price/value with industry average P/E ratio: $183.77
AMGN is 31.89% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $215.75
Present value of the expected future dividends only: $194.29
P/S (Price to Sales ratio):
4.93
Price to sales ratio is 32.64% above the industry mean
P/B (Price to book value ratio):
141.54
Price to free cash flow: 15.93
Price to free cash flow ratio is 67.77% higher than the industry
Net income growth rate (3Y):
-20.81%
Net income growth rate is -115.68% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 18.87%
Dividend yeild: 3.05%
Previous Dividend: $1.94
Previous adjusted dividend: $1.94
Previous Dividend: $7.40
Expected next dividend best case: $2.07
Expected next dividend worst case: $1.81
Average dividend payment (long-term): $1.71
Average dividend increase/decrease (growth rate) % per period: 3.06%
Expected next dividend payment date: 09/06/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 31/05/2022
Previous dividend payment date: 06/08/2022
Previous dividend record date: 17/05/2022
Previous dividend declaration date: 03/02/2022
Dividend History:
2022-05-16--$1.94
2021-11-15--$1.76
2021-05-14--$1.76
2022-02-14--$1.94
2021-08-16--$1.76
2021-02-11--$1.76
Dividend growth rate is -59.29% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3931.22%
Net debt to equity ratio:
3310.70%
Debt to assets ratio:
60.83%
Net debt to assets ratio:
51.23%
Debt-to-asset ratio is -10.67% below industry average
Ability to repay debt:
Interest coverage ratio:
9.22
Interest coverage ratio is -78.50% less than industry average
Looking forward:
Debt growth rate:
0.98%
Annual debt growth is -274% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.6
Statistical significance of correlation:
AMGN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 16.02% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.006
Covariance of price movement with the market:
0.006
Kurtosis
7.408
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.665
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
AMGN
Gross Profit Margin Ratio:
301%
Operating Profit Margin Ratio:
30.44%
Operating profit margin is 40.19% higher than the industry
Net Profit Margin Ratio:
301%
Effective Tax Rate:
12.21%
Effective tax rate is 16.64% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
624.78%
Return on equity (ROE) is 522.42% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.67%
Return on assets (ROA) is -6.94% lower than the industry
Financial Leverage:
2.6x
Current Ratio:
1.44
Current ratio is 2.03% above industry average
Cash Conversion Cycle (days):
48.5
Cash conversion cycle is -51.18% below industry average
The remaining useful life of property plant & equipment is: 13.8 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates -4% less revenue than industry average revenue per employee
EBITDA generated per employee:
459.7K
Each employee generates 17% more EBITDA than industry average revenue per employee
Profit generated per employee:
236.5K
Each employee generates 7% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
81.6K
Each employee generates 18% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.7M
Each employee generates 18% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 14.55%
Growth rate in R&D investment/expenditure is -37.18% lower than the industry
Competitors/Peer firms of
AMGN
Sanofi SA (XNAS:SNY)
INTUITIVE SURGICAL, INC. (XNAS:ISRG)
GILEAD SCIENCES, INC. (XNAS:GILD)
REGENERON PHARMACEUTICALS, INC. (XNAS:REGN)
ILLUMINA, INC. (XNAS:ILMN)
VERTEX PHARMACEUTICALS INCORPORATED (XNAS:VRTX)
BioNTech SE (XNAS:BNTX)
IDEXX LABORATORIES, INC. (XNAS:IDXX)
WALGREENS BOOTS ALLIANCE, INC. (XNAS:WBA)
Current Analyst Ratings
Strong buy�13%
Buy�29%
Hold�63%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
26.32B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.53B
19.79B
4.81B
-
5.34B
-
123.00M
10.28B
-
1.21B
3.40B
11.12B
8.01B
5.72B
6.52B
796.00M
5.72B
Statement of Cash Flow
Date:
Period:
841.00M
Differed Income Tax :
- 251000.00K
Stock Based Compensation :
-
Change in Working Capital :
- 447000.00K
Accounts Receivables:
- 195000.00K
Other Working Capital:
-
Other Non-Cash Items:
545.00M
Net Cash Provided by Operating Activities:
2.16B
Investments in PP&E:
- 190000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
6.53B
16.00M
6.54B
5.08B
4.41B
2.49B
18.52B
5.14B
14.90B
14.57B
-
-
6.07B
40.68B
-
59.20B
1.40B
844.00M
-
-
10.64B
12.89B
36.01B
9.38B
45.39B
-
58.28B
31.25B
- 29568000.00K
- 763000.0K
-
March 31, 2022 at 6:00:00 AM
16.80B
916.00M
59.20B
-
36.85B
30.3B
32.00M
47.00M
- 111000.00K
-
-
- 6360000.00K
- 1080000.00K
3.93B
- 3514000.00K
-
- 1461000.00K
6.53B
7.99B
2.16B
- 190000.00K
1.97B
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
AMGN
2023
2024
2025
2026
2027
$259.11
$268.86
$278.97
$289.47
$300.36