Why Amgen Stock Is Down Today Despite Solid Q2 Results
By no means were Amgen's (NASDAQ: AMGN) second-quarter numbers "bad." Revenue for most of its core drugs was up year over year, and the slight earnings dip is the predictable result of rising expenses. The pharmaceutical company's outlook remains optimistic as well.
Yet, S&P Global Market Intelligence data indicates Amgen shares are down 5.9% as of 12:46 p.m. ET today. The prompt for the sell-off is mostly an earnings miss, but the actual driver of the sizable setback is arguably a trading crowd that's become quick to presume the worst.
Despite the stock's setback, Amgen's doing fine
Drugmaker Amgen reported revenue of $8.39 billion for the three-month stretch ending in June, up 20% year over year and slightly topping expectations. Not counting the acquisition of Horizon Pharma in October of last year, revenue grew 5% on a 10% uptick in volume led by cholesterol drug Repatha and osteoporosis treatment Prolia.
Per-share profits, however, fell from $5.00 a year earlier to $4.97 during Q2 of this year, roughly in line with consensus estimates.
Looking ahead, Amgen now expects full-year revenue of between $32.8 billion and $33.8 billion to generate per-share operating profits of between $19.10 and $20.10. That's near where the company guided with its first-quarter report and in line with analyst calls for earnings of $19.51 per share on $33.1 billion in sales.
The market simply wanted more.
Use the opportunity
The knee-jerk response is understandable, particularly given that Amgen shares reached a record high just earlier this month and were ripe for profit-taking. The market's recent upheavals aren't helping any either, spurring investors to think and react defensively to even the smallest hints of trouble.
This particular pullback, however, is neither unusual nor concerning to would-be investors. Plenty of bullish catalysts are on the horizon for this pharmaceutical company, like the continued integration and development of Horizon's pipeline and portfolio and the ongoing development of the weight-loss drug MariTide.
Although MariTide's only in mid-stage trials now, it's a compelling alternative and prospective competitor to Novo Nordisk's Wegovy and Eli Lilly's Zepbound. More importantly to interested investors, MariTide could be Amgen's entry into a weight-loss drug market Morgan Stanley believes could grow to be worth more than $100 billion per year by 2030.
If you were waiting for the right time to step into a new stake in Amgen, this is arguably it.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends Amgen and Novo Nordisk. The Motley Fool has a disclosure policy.
