AMGN is a massive biotech company – it is $130bn+ biotech giant.
It is not just any giant – it is A GIANT THAT IS SQUEEZING 9%
and it is squeezing not on what you would usually expect –
we would generally expect that a biotech stock would be up a lot because they had a positive clinical trial result.
HOWEVER, TODAY’S MOVE FOR AMGEN IS DIFFERENT – IT IS SQUEEZING BECAUSE MANAGEMENT TEAM ANNOUNCED A LONG-TERM GUIDANCE THAT HAD A VERY POSITIVE RESPONSE FROM INVESTORS – PROBABLY LONG-ONLY GENERALIST INVESTORS.
Below is the money slide from the presentation – it lays out that
Revenue to grow at mid-single digit CAGR to 2030
While maintaining non-GAAP operating margin at 50%
Which leads to non-GAA EPS growing at high single to low double-digit CAGR
OVERALL, IT SCREENS AS A HIGHLY AMBITIOUS TARGET because of below slide –
Key takeaway is that base business is likely decline significantly (that’s part of life when running a biotech company – you lose product exclusivity) through 2030 – but there is significant contribution from “Biosimilar” and “Lumakras, Tezspire, and Pipeline”
Revenue projections look good – but they also gave out what investors LOVE these days in a rising rate environment – high dividend yield, aggressive share buyback, and seemingly achievable growth!
It will not be easy to growth through large LOEs like Enbrel – but I wish them luck!
Let’s hope their organic and “robust” development engine can truly deliver!
Stock is likely squeezing as it was a crowded short and AMGN just created a short-term runway for stock to move up.
ALWAYS BEWARE OF CROWDED SHORT POSITIONS – IT MAY BE A TRADEABLE LONG, BUT FUNDAMENTALS COULD BE DETERIORATE BECAUSE OF THOSE SHORT_TERM SQUEEZE FACORS.
