Amgen Inc. Just Missed EPS By 46%: Here's What Analysts Think Will Happen Next

Amgen Inc. (NASDAQ:AMGN) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to US$325 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$8.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 46% to hit US$1.38 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Amgen

Following the latest results, Amgen's 26 analysts are now forecasting revenues of US$33.2b in 2024. This would be a credible 7.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 13% to US$6.59. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$33.1b and earnings per share (EPS) of US$7.98 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$322, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Amgen analyst has a price target of US$381 per share, while the most pessimistic values it at US$170. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Amgen's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Amgen is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Amgen. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$322, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Amgen going out to 2026, and you can see them free on our platform here.

Even so, be aware that Amgen is showing 4 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.