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Amgen (AMGN) Falls More Steeply Than Broader Market: What Investors Need to Know

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Amgen (AMGN - Free Report) ended the recent trading session at $279.35, demonstrating a -0.35% swing from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.12%. Elsewhere, the Dow saw a downswing of 0.25%, while the tech-heavy Nasdaq depreciated by 0.41%.

Prior to today's trading, shares of the world's largest biotech drugmaker had lost 13.26% over the past month. This has lagged the Medical sector's gain of 3.58% and the S&P 500's gain of 4.83% in that time.

The upcoming earnings release of Amgen will be of great interest to investors. On that day, Amgen is projected to report earnings of $3.83 per share, which would represent a year-over-year decline of 3.77%. Meanwhile, our latest consensus estimate is calling for revenue of $7.45 billion, up 21.98% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $19.48 per share and revenue of $32.91 billion. These totals would mark changes of +4.45% and +16.75%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Amgen. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.68% lower within the past month. Amgen is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Amgen currently has a Forward P/E ratio of 14.39. Its industry sports an average Forward P/E of 22.45, so one might conclude that Amgen is trading at a discount comparatively.

One should further note that AMGN currently holds a PEG ratio of 2.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMGN's industry had an average PEG ratio of 1.46 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 82, finds itself in the top 33% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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