Value
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 6.6 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 7.7 |
| PEG | 4.5 |
| Analyst target | 3.0 |
- ▸Forward P/E: 15.9x
- ▸PEG: 1.98
AMGN · Why this verdict
Why Amgen (AMGN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Strong operating margins of 21% combined with a Piotroski financial strength score of 7 out of 9 point to a financially resilient operation that generates consistently profitable outcomes; note that the reported return on equity above 100% is almost certainly flattered by a buyback-shrunk equity base rather than reflecting the true underlying capital return. Quality breakdown | Operating margin remains at or above 18% and the Piotroski score stays at 6 or higher over the next four quarters, confirming that margin quality is not cyclically dependent on near-term conditions. | →Stable |
| CounterBiosimilar competition and potential pricing reform could compress what looks like a wide-margin franchise; stripped of the buyback effect on equity, the underlying capital returns may be more modest than headline metrics imply, making the quality premium harder to sustain under fundamental pressure. | ||
The company has beaten consensus EPS estimates in all four of the most recent quarters — delivering $5.15, $5.29, $5.64, and $6.02 against estimates of $4.77, $4.73, $5.01, and $5.28 respectively — averaging an 11.6% positive surprise that reflects disciplined guidance and reliable execution. Earnings | EPS beats consensus in each of the next two quarters with a positive surprise exceeding 5%, extending the beat streak to six consecutive quarters. | →Stable |
| CounterA four-quarter average surprise of 11.6% can narrow rapidly if management guidance becomes more precise or if pipeline challenges force downward earnings revisions; the most recent quarter's 8% surprise versus the prior two at 12–14% already suggests the magnitude of over-delivery may be moderating. | ||
With 77% of revenue flowing through three distributors — McKesson, Cencora, and Cardinal Health — any renegotiation of distribution terms, wholesaler consolidation, or demand shift affecting even one of these partners creates outsized revenue exposure for the company. Bear case | Revenue concentration from the top three distributors falls below 65% within 12 months, indicating meaningful commercial channel diversification. | →Stable |
| CounterDeep reliance on a concentrated distributor base is structural to large-cap biopharmaceuticals and reflects market reality rather than a management choice; if relationships are long-standing and contractually protected, the concentration risk may be lower in practice than it appears on paper. | ||
An explicit yield trap warning indicates that the dividend payout is elevated relative to underlying earnings power, meaning the headline yield may be partially supported by capital structure decisions rather than recurring free cash flow — creating risk of a future cut for investors relying on the income stream. Catalyst breakdown | Quarterly EPS rises above $6.50 for four consecutive quarters, establishing an earnings trajectory that comfortably covers the annual dividend payout without reliance on non-recurring sources. | →Stable |
| CounterThe company's 21% operating margins and Piotroski score of 7 signal sufficient financial health to maintain dividend payments for multiple quarters even if near-term earnings growth stalls; the yield-trap designation may reflect a timing gap rather than a structural solvency concern. | ||
Strong operating margins of 21% combined with a Piotroski financial strength score of 7 out of 9 point to a financially resilient operation that generates consistently profitable outcomes; note that the reported return on equity above 100% is almost certainly flattered by a buyback-shrunk equity base rather than reflecting the true underlying capital return.
→StableQuality breakdown
- Expectation
- Operating margin remains at or above 18% and the Piotroski score stays at 6 or higher over the next four quarters, confirming that margin quality is not cyclically dependent on near-term conditions.
CounterBiosimilar competition and potential pricing reform could compress what looks like a wide-margin franchise; stripped of the buyback effect on equity, the underlying capital returns may be more modest than headline metrics imply, making the quality premium harder to sustain under fundamental pressure.
The company has beaten consensus EPS estimates in all four of the most recent quarters — delivering $5.15, $5.29, $5.64, and $6.02 against estimates of $4.77, $4.73, $5.01, and $5.28 respectively — averaging an 11.6% positive surprise that reflects disciplined guidance and reliable execution.
→StableEarnings
- Expectation
- EPS beats consensus in each of the next two quarters with a positive surprise exceeding 5%, extending the beat streak to six consecutive quarters.
CounterA four-quarter average surprise of 11.6% can narrow rapidly if management guidance becomes more precise or if pipeline challenges force downward earnings revisions; the most recent quarter's 8% surprise versus the prior two at 12–14% already suggests the magnitude of over-delivery may be moderating.
With 77% of revenue flowing through three distributors — McKesson, Cencora, and Cardinal Health — any renegotiation of distribution terms, wholesaler consolidation, or demand shift affecting even one of these partners creates outsized revenue exposure for the company.
→StableBear case
- Expectation
- Revenue concentration from the top three distributors falls below 65% within 12 months, indicating meaningful commercial channel diversification.
CounterDeep reliance on a concentrated distributor base is structural to large-cap biopharmaceuticals and reflects market reality rather than a management choice; if relationships are long-standing and contractually protected, the concentration risk may be lower in practice than it appears on paper.
An explicit yield trap warning indicates that the dividend payout is elevated relative to underlying earnings power, meaning the headline yield may be partially supported by capital structure decisions rather than recurring free cash flow — creating risk of a future cut for investors relying on the income stream.
→StableCatalyst breakdown
- Expectation
- Quarterly EPS rises above $6.50 for four consecutive quarters, establishing an earnings trajectory that comfortably covers the annual dividend payout without reliance on non-recurring sources.
CounterThe company's 21% operating margins and Piotroski score of 7 signal sufficient financial health to maintain dividend payments for multiple quarters even if near-term earnings growth stalls; the yield-trap designation may reflect a timing gap rather than a structural solvency concern.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Amgen operates a high-quality franchise with 21% operating margins and four consecutive earnings beats averaging over 11% above estimates, but 77% of revenue flows through three distributors, the dividend yield may be unsustainable, and the stock sits within 0.2% of its near-term resistance target with a negative risk/reward — the setup favors holding an existing position rather than adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.6 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.8 |
| FCF quality | 6.8 |
| Moat | 6.9 |
| Rule of 40 | 5.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 101%
- ▸Strong margins: 21%
- ▸Strong Piotroski F-Score: 7/9
- ▸High-quality business
Growth
3.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 2.9 |
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.1 |
| Analyst rating | 7.5 |
| Price target | 4.2 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $400,451 (0.000% of mkt cap)
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 7.5 |
| growth rank | 5.6 |
- ▸Superior ROE vs peers
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.3 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 6.2 |
| volatility | 7.1 |
| put call | 9.1 |
| implied vol | 5.6 |
| beta | 10.0 |
| debt equity | 0.0 |
| news risk | 5.0 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.3 |
| dividend safety | 4.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.37
Upside
-14.7%
Downside
10.7%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 68, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityConservative — Beta 0.40<0.8, Div 269.0%, Q=7.7
Investment implication
The F-path SELL output reflects an overall score of 4.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.37 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.7, Momentum at 7.2, and Catalyst at 6.8; the weakest are Technical at 3.2, Growth at 3.4, and Insider at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.37 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Franchise Margins
Trip ifOperating margin falls below 15% for 2 consecutive quarters (from the current 21%).
- P2Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Distributor Concentration Vulnerability
Trip ifRevenue concentration from the top three distributors falls below 65% for 2 consecutive quarters.
- P4Dividend Yield Sustainability Concern
Trip ifQuarterly EPS rises above $6.50 for 4 consecutive quarters, establishing clear earnings coverage for the dividend.