Bank of America Merrill Lynch Reports on Amgen

In a report released yesterday, Bank of America Merrill Lynch commented on Amgen AMGN. In the report, Bank of America Merrill Lynch was mixed in its outlook on the company. Bank of America Merrill Lynch writes, “Our price objective of $62 is supported by our sum-of-the-parts DCF: $15/sh for Epogen/Aranesp, $20 for Neupogen/Neulasta, $15 for Enbrel, $11 for Prolia/Xgeva, $1 for other venues, $4 in net cash, offset by $4 in M&A spend and dividends (due to rounding, the products may not sum to $62 individually). Valuations are probability adjusted to reflect individual product risks. We use a WACC of 6.8%, and model sales through 2025 with no terminal value. Risks to our PO are: 1) a slower Prolia/Xgeva sales ramp, 2) a greater-than-forecast decline in Epogen revenues, 3) significant negative impact from ESA Jan 19 MEDCAC panel. Potential upside drives are: 1) a faster-than-expected Xgeva launch 2) limited Epogen impact from bundling 3) positive pipeline updates 4) better-than-expected business development impact to the overall business.” Bank of America Merrill Lynch currently has a Neutral rating on Amgen and a price target of $62.00. Shares of Amgen closed the trading day at $60.89 yesterday, up $0.77 from the opening bell.