Oppenheimer Thinks Amgen Is Severely Undervalued (AMGN)
July 30, 2010 9:21 AM
Oppenheimer & Co. is raising its 2010 EPS estimates on Amgen (NASDAQ: AMGN) after the biotech company reported a strong quarter after the bell yesterday. Oppenheimer has Amgen shares rated as Outperform and has a $73 price target.
In the report, Oppenheimer goes on to say, "On 7/29, AMGN reported 2Q EPS of $1.38 vs. our $1.24 estimate and consensus $1.30. Solid 2Q results should be somewhat tempered by slightly lowered FY10 revenue guidance. We believe AMGN's core franchises, excluding Aranesp, are stabilizing, providing an underlying base for Prolia/denosumab-driven revenue/EPS growth. We expect an approval of denosumab for SRE prevention in November to
be a positive catalyst for AMGN. While the '147 trial of denosumab for bone met prevention is difficult to handicap, we believe AMGN's current valuation reflects
muted expectations, and would expect major upside on a positive result in 4Q10. Trading at 9.8x our 2011E EPS of $5.43 (vs. 14.0x for large-cap peers), we believe
AMGN is significantly undervalued."
Shares of Amgen are trading at $52.81, down 56 cents in pre-market trading.
