We came across a bullish thesis on Amgen Inc. (AMGN) on Disruptive analytics’ Substack by Magnus Ofstad. In this article, we will summarize the bulls’ thesis on AMGN. Amgen Inc. (AMGN)’s share was trading at $280.07 as of Nov 27th. AMGN’s trailing and forward P/E were 35.77 and 13.57 respectively according to Yahoo Finance.
A close up of a lab technician in a protective suit, working with cells in a petri dish to develop innovative therapeutics for immune-related diseases.
Amgen (AMGN) presents a compelling investment opportunity amidst recent turmoil in the pharmaceutical sector caused by political developments, including the nomination of Robert F. Kennedy Jr. (RFK) as Secretary of Health under the Trump administration. While RFK’s appointment initially sparked concerns about potential disruptions to the healthcare industry, particularly through insurance policy changes, such fears may be overstated. The pharmaceutical sector is bolstered by one of Washington’s strongest lobbying groups, which is likely to counteract any extreme measures. Moreover, the federal approval process for new drugs remains rooted in science and established protocols, ensuring doctors prescribe the best treatments for patients despite political narratives.
The broader market reaction to RFK’s nomination has created significant declines in pharmaceutical stocks, presenting a contrarian buying opportunity for long-term investors. Amgen stands out due to its undervaluation and robust pipeline, particularly its experimental obesity drug, MariTide. If MariTide succeeds, it could significantly boost Amgen’s valuation, placing its share price between $350 and $400. Even in the event of MariTide underperforming, Amgen’s intrinsic value remains strong, with shares likely valued between $300 and $350. This asymmetric risk/reward profile, coupled with the company’s strong fundamentals and potential growth catalysts, makes Amgen an attractive investment at its current levels. The market’s overreaction to political concerns offers an opportunity to invest in a high-quality company with substantial upside, positioning investors to benefit from both Amgen’s pipeline advancements and a potential recovery in the broader pharmaceutical sector.
Amgen Inc. (AMGN) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held AMGN at the end of the third quarter which was 69 in the previous quarter. While we acknowledge the risk and potential of AMGN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMGN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.