Amgen Inc. (NASDAQ: AMGN) has confirmed that it will release its Q4 2021 earnings report on Monday, February 7, 2021, before the market opens.
What to look
Earnings: Stockearning’s Estimated EPS is expected to be $4.11 representing an annualized increase of 7.9%. In the third quarter, the company had GAAP EPS of $3.31, a 3% drop driven by $400 million licensing and associated expenses from the company's collaboration with Kyowa Kirin Co. Ltd. non-GAAP EPS was $4.67 representing an annualized increase of 11% due to revenue increase and impact of few weighted average shares outstanding. As a result, the company anticipates GAAP EPS of between $9.55 and $10.21 and a non-GAAP EPS range of $16.5 to $17.1 per share for the full year.
Revenue: Amgen is expected to report revenue of $6.91 billion in Q4 2021, representing an annualized increase of 4.1%. In the third quarter, the company had revenue of $6.7 billion, up 4% YoY driven by higher unit demand that was partially offset by low net selling prices. The company expects total revenue to range between $25.8 billion and $26.2 billion for the full year.
Stock movement: AMGN shares have gained 6.9% since the company released its fourth-quarter earnings. Interestingly, AMGN shares have been DOWN 28 times out of the past 49 quarters. So, the historical price reaction suggests a 57% probability of the share price going DOWN once the company reports its fiscal Q4 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 2%, while the predicted move on the seventh day is 3%.
What analysts are saying
Piper Sandler analyst Christopher Raymond told investors in a research note that according to Wolters Kluwer PriceRx, the company effectively tools various US price increases across its commercial portfolio. The analyst said that the increase is consistent with the past year that saw considerable price increases, including Enbrel up 7.4%, Prolia/Xgeva up 6%, and Otezal up 7.4%. Raymond believes that while the company management has cited US net pricing headwinds, nothing has so far changed following all the pricing focus in recent years. The analyst believes that sooner or later, there will be a political refocus on the issue of high drug prices with implications not just for the company but for the whole industry. Interestingly, the analyst maintains a buy rating in the shares with a price target of $255.
BofA analyst Geoff Meacham downgraded the stock from Buy to Hold but raised the price target from $285 to $255. In a note to investors, Meacham said that Amgen underperformed last year because of lingering COVID-19 pandemic headwinds and net pricing pressures, and "growth skepticism" is expected to continue until the pharmaceutical firm shows a clear return to solid, volume-driven sales upside for most of its main franchises. The analyst added that the company's growth is more likely to be consistent with those of rivals, even with the Otezla label and a robust launch of Tezspire and Lumakras drugs.
RBC Capital analysts Kennen MacKay raised his price target on Amgen from $216 to $218 but maintained a Sector Perform rating on the shares. MacKay updated his model following the early clearance of Amgen’s Tezspire drug in the treatment of asthma and Otezla label expansion to include mild-to-moderate psoriasis. The analyst indicated in a research note that the approvals were notable, with Tezspire’s broad label making it the only drug that doesn't have biomarker or phenotype limitations, and Otezla expansion makes it the first only oral treatment indicated for across severity levels of psoriasis.
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