Amgen Stock Is Poised to Gain in 2020, Analyst Says. Heres Why. – Barron’s

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Amgen could have a strong year as the turbulence of 2019 fades into the rearview, according to a Wednesday afternoon note by Citi analyst Mohit Bansal.

Bansal, who rates the stock a Buy, increased his price target to $275 per share from $245. Shares of Amgen (ticker: AMGN) closed on Wednesday at $236.75.

We think in 2020 the company could do more than just catching up with the Nasdaq Biotechnology Index as the setup looks even better this time versus 2019, he wrote.

Bansal argued that uncertainty around sales drop-offs for Amgen products now facing biosimilar competition had passed, and that the acquisition of Bristol-Myers Squibbs (BMY) psoriasis drug Otezla would boost Amgens growth.

The back story. Shares of Amgen are up 16.2% over the past 12 months, and down 2.3% so far in 2020. The iShares Nasdaq Biotechnology exchange-traded fund (IBB) is up 10% over the past 12 months and down 1.4% so far this year.

Whats new. In his note, Bansal argued that the AMGN story has more room to run. He said that the companys price/earnings ratio, which is now around 15, is in line with the Big Pharma companies, despite analysts expecting a higher rate of growth from Amgen.

We think the setup looks better for AMGN in 2020 as there is less uncertainty this time around, he wrote.

Bansal noted that the company is expecting a number of major catalysts in 2020, including data on lung-cancer, asthma, psoriasis, and heart-failure treatments.

He also said that the resolution of an intellectual property case around Amgens Enbrel in the companys favor cleared a major overhang and made the stock easy to own.

Looking forward. Amgen shares were down 1.1%, at $234.07, in recent trading, while the S&P 500 was down 0.2%. The company will announce its fourth-quarter earnings next Thursday, Jan. 30, after the market closes.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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Amgen Stock Is Poised to Gain in 2020, Analyst Says. Heres Why. - Barron's