Goldman Sachs Removes "Sell" From Amgen (AMGN) On Leadership Change
Tweet Send to a FriendGet Alerts AMGN Hot Sheet
Price: $105.63 +0.63%
Rating Summary:
12 Buy, 15 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
12 Buy, 15 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade AMGN Now!
Goldman Sachs upgraded Amgen (NASDAQ: AMGN) from Sell to Neutral with a price target of $57 (up from $50) following the leadership change.
Current CEO and Chairman Kevin Sharer, and the EVP of Research Roger Perlmutter will be retiring. President and COO Robert Bradway will replace Sharer and Senior Vice President Sean Harper will replace Perlmutter.
"We see the change in leadership as positive as we have long argued that Amgen needs new strategic direction," Goldman's analyst said.
Goldman notes that shares of Amgen have been due to concerns about decelerating core franchises, pipeline productivity, and capital allocation. The company's solutions has been aggressive share repurchases, which have been "ineffective."
With the new management, Goldman would like to see:
1) A clear shift in capital allocation, with a significantly bigger focus on driving top line growth vs a predominant focus on buybacks.
2) Suspension of 2015 financial goals: We see a $16-$18bn revenue goal as challenging and believe having this guidance in place may create wrong incentives to hit the target vs making the right long term decisions.
3) A new perspective on the R&D platform, which has been relatively unproductive for the last decade.
For an analyst ratings summary and ratings history on Amgen click here. For more ratings news on Amgen click here.
Shares of Amgen closed at $58.62 yesterday, with a 52 week range of $47.66-$61.53.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
Current CEO and Chairman Kevin Sharer, and the EVP of Research Roger Perlmutter will be retiring. President and COO Robert Bradway will replace Sharer and Senior Vice President Sean Harper will replace Perlmutter.
"We see the change in leadership as positive as we have long argued that Amgen needs new strategic direction," Goldman's analyst said.
Goldman notes that shares of Amgen have been due to concerns about decelerating core franchises, pipeline productivity, and capital allocation. The company's solutions has been aggressive share repurchases, which have been "ineffective."
With the new management, Goldman would like to see:
1) A clear shift in capital allocation, with a significantly bigger focus on driving top line growth vs a predominant focus on buybacks.
2) Suspension of 2015 financial goals: We see a $16-$18bn revenue goal as challenging and believe having this guidance in place may create wrong incentives to hit the target vs making the right long term decisions.
3) A new perspective on the R&D platform, which has been relatively unproductive for the last decade.
For an analyst ratings summary and ratings history on Amgen click here. For more ratings news on Amgen click here.
Shares of Amgen closed at $58.62 yesterday, with a 52 week range of $47.66-$61.53.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- UPDATE: Leerink Swann Upgrades Bristol-Myers Squibb Co. (BMY) to Outperform
- Morgan Stanley Says Tesla (TSLA) 'Top Pick in U.S. Autos'
- Citi Upgrades Gap, Inc. (GPS) to Buy
Create E-mail Alert Related Categories
Hot Upgrades, UpgradesRelated Entities
Goldman Sachs
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
