HSBC Cuts Amgen Rating on Valuation Concerns, Lowers Price Target
HSBC downgraded Amgen (AMGN) stock rating to 'Hold' from 'Buy', citing valuation concerns. The bank also lowered its price target to $425 from $445.
The company's shares have declined nearly 12% over the past week, but they remain undervalued at current levels, according to InvestingPro analysis. Amgen is trading at a P/E ratio of 24.3.
HSBC analyst Morten Herholdt stated that the shares have re-rated on strong execution and positive estimate revisions, leaving the stock trading around fair value and close to the firm's target price.
The bank's long-term thesis remains unchanged: Amgen can work through the patent cliff via rare disease exposure, new launches, and a growing biosimilar portfolio. However, HSBC sees limited near-term upside due to steady patent expiries that will cap growth at low single digits.