Amgen, Inc. (AMGN)

Results over the past few quarters demonstrate the challenging environment for Amgen, Inc. (AMGN - Analyst Report) specifically with its key products, Aranesp and Enbrel. Management believes that the first quarter represents a trough with respect to product sales.

We struggle to see what re-accelerates Amgen's top-line in the second half of the year. Management's revenue guidance of $14.4 to $14.8 billion looks high to us, and seems to include significant inventory stocking on key product and/or a big upfront licensing deal for denosumab. We are hesitant to model either.

Amgen should be able to meet its EPS target of between $4.55 and $4.75, but with the top-line most likely staying weak, we struggle to see how the stock moves higher. We are advising investors to exit the stock. Our target is $40.