HSBC Downgrades Amgen Stock to Hold Due to Valuation Concerns

HSBC has downgraded its rating of Amgen stock to Hold from Buy due to valuation concerns. The price target for the biotech giant was lowered to $425 from $445, representing a nearly 4% decrease in value. Despite this, InvestingPro analysis suggests that Amgen shares remain undervalued at current levels, with a P/E ratio of 24.3.

Morten Herholdt, an analyst at HSBC, stated that the shares have re-rated on strong execution and positive estimate revisions, leaving them trading around fair value and close to the firm's target price. However, HSBC sees limited near-term upside due to steady patent expiries, which are likely to cap growth to low single digits.

The company's long-term thesis remains unchanged that Amgen can work through the patent cliff via rare disease exposure, new launches, and a growing biosimilar portfolio. This is expected to be driven by major pipeline value drivers, including MariTide, Olpasiran, and Imdelltra, which are back-ended to late 2027.