By Senad Karaahmetovic
Morgan Stanley analysts upgraded shares of Amgen (NASDAQ:AMGN) to Overweight with a price target of $279 per share (up from $257).
The analysts believe that the market is under-appreciating Amgen’s upside that stems from “the mid-term pipeline, including AMG133 for obesity and Amjevita biosimilar launch.”
“We believe Amgen is largely derisked providing defensiveness in this market with upside optionality on growth,” they said in an upgrade note.
Morgan Stanley estimates that total addressable market (TAM) for obesity is over $50 billion. Amgen will likely become the first biotech company to launch its product in 2023, hence they see it “best positioned to capture outsized market share,” which would position the company “attractively versus peers.”
On the risk side, Morgan Stanley highlights tax risks and a mid-decade erosion of the core business.
“Investors start to worry about the ~50% of revenues exposed to biosimilar competition in the 2025-30 time frame,” the analysts added.
Amgen shares are up almost 3% in pre-open today.