Some Shareholders Feeling Restless Over Amgen Inc.'s (NASDAQ:AMGN) P/E Ratio
Some Shareholders Feeling Restless Over Amgen Inc.'s (NASDAQ:AMGN) P/E Ratio
When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 16x, you may consider Amgen Inc. (NASDAQ:AMGN) as a stock to potentially avoid with its 21.8x P/E ratio. However, the P/E might be high for a reason and it requires further investigation to determine if it's justified.
With its earnings growth in positive territory compared to the declining earnings of most other companies, Amgen has been doing quite well of late. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. If not, then existing shareholders might be a little nervous about the viability of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Amgen.Does Growth Match The High P/E?
Amgen's P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market.
If we review the last year of earnings growth, the company posted a worthy increase of 3.1%. Although, the latest three year period in total hasn't been as good as it didn't manage to provide any growth at all. Therefore, it's fair to say that earnings growth has been inconsistent recently for the company.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 7.4% per year over the next three years. With the market predicted to deliver 11% growth each year, the company is positioned for a weaker earnings result.
With this information, we find it concerning that Amgen is trading at a P/E higher than the market. Apparently many investors in the company are way more bullish than analysts indicate and aren't willing to let go of their stock at any price. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.
What We Can Learn From Amgen's P/E?
We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
Our examination of Amgen's analyst forecasts revealed that its inferior earnings outlook isn't impacting its high P/E anywhere near as much as we would have predicted. When we see a weak earnings outlook with slower than market growth, we suspect the share price is at risk of declining, sending the high P/E lower. This places shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Before you take the next step, you should know about the 2 warning signs for Amgen (1 makes us a bit uncomfortable!) that we have uncovered.
If you're unsure about the strength of Amgen's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
當將近一半的美國公司的市盈率(或 “市盈率”)低於16倍時,您可以將安進公司(納斯達克股票代碼:AMGN)視爲市盈率爲21.8倍的股票,可能會避免。但是,市盈率之高可能是有原因的,需要進一步調查以確定其是否合理。
與大多數其他公司的收益下降相比,其收益增長處於正值區間,安進最近表現良好。市盈率可能很高,因爲投資者認爲該公司將繼續比大多數人更好地應對更廣泛的市場阻力。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
如果你想了解分析師對未來的預測,你應該查看我們關於安進的免費報告。增長與高市盈率相匹配嗎?
安進的市盈率對於一家有望實現穩健增長且重要的是表現好於市場的公司來說是典型的。
如果我們回顧一下去年的收益增長,該公司公佈了3.1%的可觀增長。但是,最近三年的總體表現並不那麼好,因爲它根本沒有帶來任何增長。因此,可以公平地說,該公司最近的收益增長一直不穩定。
展望未來,報道該公司的分析師的估計表明,未來三年收益每年將增長7.4%。預計市場每年將實現11%的增長,因此該公司的盈利業績將疲軟。
有了這些信息,我們發現安進的交易市盈率高於市場。顯然,該公司的許多投資者比分析師所表示的要看漲得多,他們不願意以任何價格拋售股票。如果市盈率降至更符合增長前景的水平,這些股東很有可能爲未來的失望做好準備。
我們可以從安進的市盈率中學到什麼?
我們可以說,市盈率的力量主要不是作爲估值工具,而是衡量當前投資者情緒和未來預期。
我們對安進分析師預測的審查顯示,其較差的盈利前景對其高市盈率的影響沒有我們預期的那麼大。當我們看到疲軟的盈利前景且低於市場增長速度時,我們懷疑股價有下跌的風險,導致高市盈率走低。這使股東的投資面臨重大風險,潛在投資者面臨支付過高溢價的危險。
在你採取下一步行動之前,你應該了解安進的 2 個警告信號(1 個讓我們有點不舒服!)這是我們發現的。
如果您不確定安進業務的實力,爲什麼不瀏覽我們的互動股票清單,這些股票具有穩健的業務基本面,您可能錯過了其他一些公司。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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