On Tuesday, Piper Sandler reaffirmed its Overweight rating on Amgen (NASDAQ:AMGN) with a steady price target of $344.00. The firm's stance comes despite an initial dip in Amgen's stock following the release of Phase 2 data for the company's investigational drug, MariTide™. The drug is being evaluated for its efficacy and safety profile in weight loss management.
The analyst cited the drug's potential to achieve weight loss more rapidly than its comparator, tirzepatide, with MariTide™ showing results at 52 weeks versus 72 weeks for tirzepatide. Additionally, MariTide™ offers the convenience of monthly dosing compared to the weekly dosing required by tirzepatide. However, there is a noted safety concern with MariTide™ due to higher rates of nausea and vomiting, particularly after the first dose.
Despite these side effects, Piper Sandler believes that Amgen has a compelling product that stands out in the weight loss drug market, which is both significant in size and expanding. The analyst noted that while the asset is currently not included in their financial models, it is considered a unique offering within the competitive landscape.
The report also addressed the market's initial reaction to the top-line data, expecting Amgen's stock to recover from the early sell-off. The firm suggests that the market may not have fully appreciated the potential of MariTide™ and its place in the weight loss category.
In summary, Piper Sandler's position reflects a positive outlook for Amgen's stock, underpinned by the potential of MariTide™ to become a differentiated product in the growing market for weight loss treatments. The Overweight rating and $344.00 price target indicate the firm's confidence in the stock's performance moving forward.
In other recent news, biotechnology company Amgen has seen significant developments. The company's Q3 revenues increased by 23%, reaching $8.5 billion, and projections for 2024 revenues range between $33.0 billion and $33.8 billion. Amgen has also announced the appointment of Howard Chang, M.D., Ph.D., as its new Senior Vice President of Research and Chief Scientific Officer.
Morgan Stanley (NYSE:MS) maintained an Equalweight rating on Amgen shares, with a price target of $22.00, following the announcement of Phase 2 trial results for its diabesity treatment, MariTide. The firm projects worldwide unadjusted sales of MariTide to reach approximately $5.9 billion by 2033.
Citi initiated coverage on Amgen with a neutral rating and a $335 price target, focusing on the potential impact of MariTide. Other analyst firms such as TD Cowen, Jefferies, and Cantor Fitzgerald have maintained their Buy or Overweight ratings for the company, with price targets ranging from $383 to $405.
BMO Capital Markets has also maintained an Outperform rating on Amgen with a price target of $362.00, while Barclays (LON:BARC) reiterated an Equalweight rating, maintaining a price target of $315.00.
InvestingPro Insights
Amgen's financial metrics and market position offer additional context to Piper Sandler's optimistic outlook. With a substantial market capitalization of $139.95 billion, Amgen stands as a prominent player in the Biotechnology industry, as highlighted by InvestingPro Tips. The company's revenue growth of 21.25% over the last twelve months and a quarterly growth of 23.18% in Q3 2024 demonstrate strong financial performance, aligning with the potential impact of new products like MariTide™.
InvestingPro Tips also reveal that Amgen has raised its dividend for 14 consecutive years, showcasing financial stability and shareholder value. This consistent dividend growth, coupled with a current dividend yield of 3.06%, may provide additional appeal to investors beyond the potential of its drug pipeline.
While the P/E ratio of 32.99 and the adjusted P/E of 47.93 for the last twelve months suggest a premium valuation, this could be justified by the market's expectations for future growth, particularly from promising treatments like MariTide™. The company's profitability over the last twelve months, as noted in the InvestingPro Tips, further supports Piper Sandler's Overweight rating.
Investors seeking a more comprehensive analysis can access 7 additional InvestingPro Tips for Amgen, providing a deeper understanding of the company's financial health and market position.
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