Amgen's Forward Multiple Hides a Margin of Error

Amgen's (AMGN) shares are trading at around $393 per share, which translates to a trailing multiple of about 23.3 times its adjusted earnings over the last twelve months.

The company has been experiencing declining sales for its Prolia and XGEVA medications due to biosimilar rivals, but this decline is being offset by growth in other areas.

Amgen's key growth drivers grew 26% year-over-year in aggregate during the second quarter of 2026, accounting for nearly 70% of product sales. Meanwhile, Repatha alone saw a 37% increase in sales over the same period.

The forward multiple looks more promising, with analysts expecting Amgen to earn around $22.60 to $25.65 per share in fiscal 2027, which would translate to a price of about 16.1 times earnings at today's prices.

However, this assumes that the company's profit margins will continue to expand, which is uncertain given the significant spending Amgen is undertaking on its MariTide obesity asset and other projects.