Value
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.5 |
| P/S | 5.8 |
| EV/EBITDA | 1.7 |
| Fwd P/E | 6.7 |
| PEG | 3.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 19.0x
- ▸PEG: 2.78
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. How we score · Editorial policy
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VerdictSELL
Overall score6.1/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Amgen is a high-quality, low-beta drug manufacturer with 91% ROE and strong momentum, but at $466.01 the stock trades 23.3% above the $357.59 analyst target and depends on three wholesalers for 77% of sales, so the setup favors reducing rather than adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Amgen earns an excellent 91% return on equity with 23% margins and a 7/9 Piotroski F-Score, placing it at the top of peers on quality (peer quality rank 8.7/10). Quality breakdown | Margins and return on equity should hold, keeping the quality score near 7.8/10 over the next 12 months. | →Stable |
| CounterA 91% ROE is partly inflated by a small equity base, and cash-flow quality is only 6.9/10, so the headline return overstates economic strength. | ||
Three wholesalers (McKesson, Cencora and Cardinal Health) account for 77.0% of sales and the United States for 73.0%, so a pricing or channel dispute would hit results disproportionately. Bear case | Customer concentration should stay near current levels without margin concessions to wholesalers. | →Stable |
| CounterWholesaler concentration is standard for drug makers and these customers are pass-through distributors, so the practical risk may be lower than the percentage implies. | ||
The price of $466.01 is already 23.3% above the $357.59 analyst target, with downside of 15.0% and negative reward-to-risk of -1.55. Upside pct | Analyst targets should be revised up toward the price, or the price should consolidate toward the target. | ↓Deteriorating |
| CounterTargets are lagging a strong momentum run and analyst rating is mid-range (5.0/10), so the stock may simply be repricing ahead of estimates. | ||
Momentum is strong at 7.7/10, with the stock above its 200-day average and rising on-balance volume, but the RSI of 76 is overbought. Momentum breakdown | The price should hold above the 200-day average while volume accumulation continues. | →Stable |
| CounterOverbought readings with a technical score of 4.0/10 and price near the top of its Bollinger range point to elevated pullback risk. | ||
The stock trades at a forward P/E of 19.0x with a PEG of 2.78, a valuation that requires earnings growth well above the weak revenue growth component (4.9/10). Valuation breakdown | Earnings growth should narrow the PEG toward 2.0 over 12 months. | ↓Deteriorating |
| CounterEarnings growth scores a perfect 10/10, so earnings strength could justify the multiple even if revenue growth stays modest. | ||
Amgen earns an excellent 91% return on equity with 23% margins and a 7/9 Piotroski F-Score, placing it at the top of peers on quality (peer quality rank 8.7/10).
→StableQuality breakdown
- Expectation
- Margins and return on equity should hold, keeping the quality score near 7.8/10 over the next 12 months.
CounterA 91% ROE is partly inflated by a small equity base, and cash-flow quality is only 6.9/10, so the headline return overstates economic strength.
Three wholesalers (McKesson, Cencora and Cardinal Health) account for 77.0% of sales and the United States for 73.0%, so a pricing or channel dispute would hit results disproportionately.
→StableBear case
- Expectation
- Customer concentration should stay near current levels without margin concessions to wholesalers.
CounterWholesaler concentration is standard for drug makers and these customers are pass-through distributors, so the practical risk may be lower than the percentage implies.
The price of $466.01 is already 23.3% above the $357.59 analyst target, with downside of 15.0% and negative reward-to-risk of -1.55.
↓DeterioratingUpside pct
- Expectation
- Analyst targets should be revised up toward the price, or the price should consolidate toward the target.
CounterTargets are lagging a strong momentum run and analyst rating is mid-range (5.0/10), so the stock may simply be repricing ahead of estimates.
Momentum is strong at 7.7/10, with the stock above its 200-day average and rising on-balance volume, but the RSI of 76 is overbought.
→StableMomentum breakdown
- Expectation
- The price should hold above the 200-day average while volume accumulation continues.
CounterOverbought readings with a technical score of 4.0/10 and price near the top of its Bollinger range point to elevated pullback risk.
The stock trades at a forward P/E of 19.0x with a PEG of 2.78, a valuation that requires earnings growth well above the weak revenue growth component (4.9/10).
↓DeterioratingValuation breakdown
- Expectation
- Earnings growth should narrow the PEG toward 2.0 over 12 months.
CounterEarnings growth scores a perfect 10/10, so earnings strength could justify the multiple even if revenue growth stays modest.
Per-dimension breakdown
Quality
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.8 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.1 |
| FCF quality | 6.9 |
| Moat | 6.9 |
| Rule of 40 | 5.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 91%
- ▸Strong margins: 23%
- ▸Strong Piotroski F-Score: 7/9
- ▸High-quality business
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 10.0 |
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Overbought (RSI 72)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 5.0 |
| Price target | 3.0 |
- ▸LLM news sentiment: +0.56 (n=5)
- ▸Below analyst target
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.4 |
- ▸Negligible insider selling — $4,106,812 (0.002% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 8.7 |
| growth rank | 6.9 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 1.9 |
| 52w position | 9.4 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 6.3 |
| volatility | 6.5 |
| put call | 8.6 |
| implied vol | 4.6 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 0.1 |
- ▸Above max pain $250
- ▸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 | 8.1 |
| dividend safety | 4.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings today
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- NEWS_BOOST:EARNINGS:0.80
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.7=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.69
Upside
-22.5%
Downside
13.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityConservative — Beta 0.42<0.8, Div 2.2%, Q=7.8
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.7=NEGATIVE, EARNINGS_PROXIMITY:0d<=7d) reinforce the read. Current asymmetry R:R is -1.69 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.8, Growth at 7.5, and Momentum at 7.2; the weakest are Value at 4.3, Technical at 4.4, and Peer rank at 4.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Return Quality Franchise
Trip ifMargins fall below 18% from the current 23%.
- P2Wholesaler Customer Concentration
Trip ifShare of sales to the three wholesalers exceeds 85% from the current 77%.
- P3Price Above Analyst Target
Trip ifAnalyst target rises above $450, within 4% of the current $466.01 price.
- P4Overbought Uptrend Momentum
Trip ifMomentum score falls below 5.0 from the current 7.7.
- P5Premium Forward Valuation
Trip ifForward P/E exceeds 24x from the current 19.0x.