AMGN
AMGN
Hold 2026-03-17
Model
DDM
Price at Report
$366.25
Base IV
$404.21
Bear IV
$319.98
Bull IV
$510.94
Entry Zone: 336-372 · Sell Above: 434
Bore Family Office
Valuation Report — Amgen Inc. (AMGN) • March 17, 2026
3-Stage DDM (Ke) • Discount Rate: 6.87% • Current Price: $366.25
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Amgen Inc. is one of the world's largest independent biopharmaceutical companies, founded in 1980 in Thousand Oaks, California. It pioneered the development of therapeutics using recombinant DNA and monoclonal antibody technology, with blockbuster franchises spanning oncology, inflammation, cardiovascular, and metabolic disease — including Enbrel, Prolia/Xgeva, and Repatha.
The 2023 acquisition of Horizon Therapeutics ($28B) added rare disease exposure through Tepezza and Krystexxa, meaningfully expanding the pipeline and revenue base but adding ~$27B in gross debt. The emerging pipeline catalyst is MariTide (AMG 133), a once-monthly injectable GLP-1 receptor/GIP receptor agonist for obesity — Phase 3 data expected 2026/2027. Amgen is one of the world's premier dividend-growth biopharma stories with 16 consecutive years of dividend increases and a 5-yr CAGR of ~10%.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| General Medicine (Repatha, Prolia, Xgeva, Otezla) | $14,900M | 41% | +8.0% | — | Largest revenue segment; Repatha cardiovascular and bone health products growing mid-single digits |
| Oncology (Blincyto, Lumakras, Tarlatamab, Xgeva) | $9,400M | 26% | +12.0% | — | Fastest-growing; Blincyto and new oncology approvals driving double-digit growth |
| Rare Disease / Horizon (Tepezza, Krystexxa, Uplizna) | $5,500M | 15% | +14.0% | — | Post-acquisition build; Tepezza thyroid eye disease market leader; high-margin specialty drugs |
| Inflammation (Enbrel, Tezspire) | $5,100M | 14% | -5.0% | — | Enbrel declining due to biosimilar competition; Tezspire partially offsetting |
| Other / Biosimilars | $1,851M | 5% | +15.0% | — | Growing biosimilar business (Mvasi, Kanjinti) provides diversification |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $25,979 | $26,323 | $28,190 | $33,424 | $36,751 |
| EBITDA ($M) | $11,037 | $12,983 | $11,968 | $12,850 | $14,247 |
| Operating Income ($M) | $7,639 | $9,566 | $7,897 | $7,258 | $9,080 |
| Net Income ($M) | $5,893 | $6,552 | $6,717 | $4,090 | $7,711 |
| EPS (diluted) | $10.28 | $12.11 | $12.49 | $7.56 | $14.23 |
| Free Cash Flow ($M) | $8,381 | $8,785 | $7,359 | $10,394 | $8,100 |
| Annual DPS | $7.040 | $7.760 | $8.520 | $9.000 | $9.520 |
| Total Debt ($M) | $33,309 | $38,945 | $64,613 | $60,099 | $54,604 |
| Rev YoY Growth | — | +1.3% | +7.1% | +18.6% | +10.0% |
| EBITDA Margin | 42.5% | 49.3% | 42.5% | 38.4% | 38.8% |
| Operating Margin | 29.4% | 36.3% | 28.0% | 21.7% | 24.7% |
| Net Margin | 22.7% | 24.9% | 23.8% | 12.2% | 21.0% |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.476 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 6.87% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.00% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.44% | × (1 − 14%) |
| Weight Equity (We) | 78.4% | Mkt cap $0.0B |
| Weight Debt (Wd) | 21.6% | Gross debt $0.0B |
| WACC | 6.14% | DCF discount rate |
📈 DDM Scenarios
$320
🔴 Bear
$404
📊 Base
$511
🚀 Bull
$366.25
Current Price
$345
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 2.5% | 2.0% | 2.0% | 6.87% | $320 | ▼12.6% |
| 📊 Base | 4.0% | 3.2% | 2.8% | 6.87% | $404 | ▲10.4% |
| 🚀 Bull | 6.0% | 4.5% | 3.3% | 6.87% | $511 | ▲39.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 2.5% | Stage 2: 2.0% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $15.313 | $14.329 | $14.33 |
| Year 2 | Stage 1 | $15.696 | $13.743 | $28.07 |
| Year 3 | Stage 1 | $16.089 | $13.181 | $41.25 |
| Year 4 | Stage 1 | $16.491 | $12.642 | $53.90 |
| Year 5 | Stage 1 | $16.903 | $12.125 | $66.02 |
| Year 6 | Stage 2 | $17.241 | $11.573 | $77.59 |
| Year 7 | Stage 2 | $17.586 | $11.045 | $88.64 |
| Year 8 | Stage 2 | $17.938 | $10.542 | $99.18 |
| Year 9 | Stage 2 | $18.297 | $10.062 | $109.24 |
| Year 10 | Stage 2 | $18.663 | $9.603 | $118.85 |
| Terminal | — | TV=$390.88 | PV(TV)=$201.13 (63% of IV) |
Base Scenario
Stage 1: 4.0% | Stage 2: 3.2% | Terminal: 2.8%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $15.538 | $14.539 | $14.54 |
| Year 2 | Stage 1 | $16.159 | $14.148 | $28.69 |
| Year 3 | Stage 1 | $16.805 | $13.768 | $42.46 |
| Year 4 | Stage 1 | $17.478 | $13.399 | $55.85 |
| Year 5 | Stage 1 | $18.177 | $13.039 | $68.89 |
| Year 6 | Stage 2 | $18.758 | $12.591 | $81.48 |
| Year 7 | Stage 2 | $19.359 | $12.159 | $93.64 |
| Year 8 | Stage 2 | $19.978 | $11.741 | $105.38 |
| Year 9 | Stage 2 | $20.618 | $11.338 | $116.72 |
| Year 10 | Stage 2 | $21.277 | $10.949 | $127.67 |
| Terminal | — | TV=$537.42 | PV(TV)=$276.54 (68% of IV) |
Bull Scenario
Stage 1: 6.0% | Stage 2: 4.5% | Terminal: 3.3%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $15.836 | $14.818 | $14.82 |
| Year 2 | Stage 1 | $16.787 | $14.698 | $29.52 |
| Year 3 | Stage 1 | $17.794 | $14.578 | $44.09 |
| Year 4 | Stage 1 | $18.861 | $14.459 | $58.55 |
| Year 5 | Stage 1 | $19.993 | $14.342 | $72.90 |
| Year 6 | Stage 2 | $20.893 | $14.024 | $86.92 |
| Year 7 | Stage 2 | $21.833 | $13.713 | $100.63 |
| Year 8 | Stage 2 | $22.815 | $13.409 | $114.04 |
| Year 9 | Stage 2 | $23.842 | $13.111 | $127.15 |
| Year 10 | Stage 2 | $24.915 | $12.820 | $139.97 |
| Terminal | — | TV=$720.93 | PV(TV)=$370.97 (73% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 4.9% | $535 | $605 | $704 | $856 | $1116 |
| 5.4% | $465 | $515 | $582 | $677 | $822 |
| 5.9% | $411 | $448 | $496 | $560 | $651 |
| 6.4% | $368 | $396 | $431 | $477 | $539 |
| 6.9% | $333 | $355 | $382 | $416 | $460 |
| 7.4% | $304 | $321 | $342 | $368 | $401 |
| 7.9% | $279 | $293 | $310 | $331 | $355 |
| 8.4% | $258 | $270 | $284 | $300 | $319 |
| 8.9% | $240 | $250 | $261 | $274 | $290 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/E (fwd) | EV/EBITDA | FCF Yield | Div Yield | Div Growth 5yr |
|---|---|---|---|---|---|
| AMGN (Amgen) | 16.1× | 18.3× | 4.1% | 2.75% | 7.5% |
| ABBV (AbbVie) | 14.2× | 12.8× | 5.8% | 3.7% | 9.2% |
| BMY (Bristol-Myers) | 7.2× | 8.5× | 8.9% | 4.2% | 3.1% |
| GILD (Gilead) | 12.8× | 10.9× | 7.2% | 3.3% | 4.2% |
| REGN (Regeneron) | 19.4× | 15.7× | 5.1% | 0.0% | N/A |
| Biopharma Average (ex-AMGN) | 13.4× | 12.0× | 6.8% | 2.8% | 5.5% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $10.080 |
| Current Yield | 2.75% |
| Consecutive Growth Years | 16 |
| 1-yr DPS CAGR | +5.8% |
| 3-yr DPS CAGR | +7.8% |
| 5-yr DPS CAGR | +7.5% |
| 10-yr DPS CAGR | +17.2% |
| Payout Ratio (DPS/EPS) | 68.9% |
| FCF Payout Ratio | 67.4% |
| Sustainability Verdict | Safe |
Dividend is safe and well-covered by FCF. The $54B gross debt burden from Horizon acquisition is significant but manageable — $8–10B FCF/yr provides ample coverage after interest payments. Payout ratio of 68.9% is elevated vs. pharma peers but consistent with Amgen's capital return commitment. 16-year streak is extremely unlikely to be broken given FCF strength. DPS growth may moderate to 5–6%/yr (from 10%/yr historical) as debt is prioritized, but the dividend itself is rock-solid.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $12.11 | — | — | — | Actual |
| 2023 | $12.49 | — | — | — | Actual |
| 2024 | $7.56 | — | — | — | Actual |
| 2025 | $14.23 | — | — | — | Actual |
| 2026 | $21.17 | $22.82 | $24.54 | 37 | Estimate |
| 2027 | $20.38 | $23.73 | $26.25 | 33 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $26.3B | — | — | — | Actual |
| 2023 | $28.2B | — | — | — | Actual |
| 2024 | $33.4B | — | — | — | Actual |
| 2025 | $36.8B | — | — | — | Actual |
| 2026 | $36.6B | $38.6B | $40.6B | 37 | Estimate |
| 2027 | $36.3B | $39.5B | $44.9B | 33 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| David Amsellem | Piper Sandler | Buy | $432 | +18.0% |
| Jasper Hellweg | Argus Research | Strong Buy | $400 | +9.2% |
| Mohit Bansal | Wells Fargo | Hold | $375 | +2.4% |
| Akash Tewari | Jefferies | Hold | $350 | -4.4% |
| Emily Field | Barclays | Hold | $350 | -4.4% |
💡 Investment Thesis
- MariTide GLP-1 optionality: Phase 3 data in 2026/27 on AMG 133 (monthly injectable obesity drug) represents massive unpriced optionality. Even a 10% market share of the $100B+ GLP-1 market = $10B+ in revenue — transformative at Amgen's scale. If MariTide succeeds, this is a $500+ stock; success is not priced in at current levels.
- 16-year dividend growth streak: Amgen has raised its dividend every year since 2011 with a 10-year CAGR of ~17%. Even with Horizon debt constraints, the 5.8% recent growth rate covers 2.75% yield well — FCF payout ~67%, leaving ample room.
- Post-Horizon debt paydown: FY2025 FCF was $8.1B; with $54B gross debt, Amgen is targeting leverage reduction through FY2027. Each year of paydown increases DPS capacity — Horizon synergies are beginning to materialize in earnings.
- Relative valuation discount: At 16× forward P/E vs. biopharma peer average of 20×+, AMGN trades at a meaningful discount. The Hold consensus reflects near-term debt overhang, not fundamental impairment — patient investors are rewarded.
- Pipeline breadth: Beyond MariTide, Tarlatamab (DLL3, small cell lung cancer), Bemarituzumab (gastric), and Rocatinlimab (atopic dermatitis) represent $5–$15B in additional addressable market. Risk is distributed, not concentrated.
⚖️ DDM Verdict: Hold — Amgen Inc. (AMGN)
Current price: $366.25 | Analyst Avg PT: $345.39
$320
🔴 Bear
$404
📊 Base
$511
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$372 | Begin position |
| Tier 2 — Add | ≤$362 | Add on weakness |
| Tier 3 — Full | ≤$336 | Full allocation |
| Sell Alert | ≥$434 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Hold AMGN at current levels ($366.25). The stock trades essentially at analyst consensus average PT ($345.39) with genuine upside only if MariTide Phase 3 data is positive — a binary event in 2026/27. The 2.75% dividend yield with 16 consecutive growth years makes this a core hold for dividend-growth investors, but new capital should wait for either a pullback toward $320–330 or MariTide data resolution. Becomes a Strong Buy at $310–320; becomes a Reduce above $400 without MariTide catalyst.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Choice | DDM chosen — Amgen is a 16-year dividend growth story with predictable DPS trajectory. FCF payout ratio 67% → dividends track FCF trajectory reliably. DCF cross-check would give similar result given low Ke. |
| Ke Build | Rf=4.25% (10-yr Treasury), β=0.476 (Finnhub; low-beta defensive biopharma), ERP=5.5% → Ke=6.87%. This is a genuinely low discount rate driven by Amgen's defensive characteristics — verified against peer Ke values. |
| DPS Base | Used FY2026 annualized DPS of $10.08 ($2.52/qtr × 4). DPS payout 68.9% of GAAP EPS; 67.4% of FCF — both reasonable for a mature pharma company. Chose DPS (not FCF/share) as base given manageable payout ratio (unlike PM at 81%). FCF/share is $14.94 — provides 48% buffer above DPS. |
| Growth Rates | Base 4.0% — calibrated to analyst consensus PT implied growth. Historical 5-yr CAGR 7.5%; decelerating due to Horizon debt constraints. Bull 6.0% assumes MariTide success partially captured; Bear 2.5% prices in biosimilar headwinds and debt-constrained DPS. |
| Sanity Check | Base IV vs analyst consensus PT $345.39. Note: current price $366.25 already slightly ABOVE consensus — confirming Hold rating. Bull IV gives $432+ upside only with MariTide success. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.