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Amgen Stock Looks to Break Out After Analyst Upgrade

Amgen Inc. (AMGN) shares rose more than 3% during Monday’s session after Raymond James upgraded the stock to Outperform with a $255 price target and amid a wider rally across the stock market. Analyst Dane Leone believes that disruptions for Amgen due to the COVID-19 pandemic will be limited relative to its peers and cited the company’s already conservative guidance as the reason for the upgrade from Market Perform to Outperform.

The analyst believes that the GALACTIC-HF study is likely to read out by the end of 2020 and that the outcome is likely to be positive. In addition, he believes that the Phase 2 monotherapy study of AMG 510 may support a New Drug Application for a subset of non-small cell lung cancer patients.

Other analysts are a bit more cautious on the name. Last week, Oppenheimer’s Jay Olson lowered his price target on Amgen shares to $240 but maintained an Outperform rating on the stock. He cited lower sales estimates for Aimovig, Repatha, Enbrel, Otezla, and Prolia due to the COVID-19 outbreak.

TrendSpider

From a technical standpoint, the stock is attempting to break out from its 200-day moving average at $206.50 and trendline resistance around the same levels. The relative strength index (RSI) remains neutral with a reading of 50.4, but the moving average convergence divergence (MACD) recently experienced a bullish crossover that could signal upside ahead.

Traders should watch for a breakout from the 200-day moving average and trendline resistance toward the 50-day moving average at $213.51 or other reaction highs. If the stock breaks down from these levels, it could see further consolidation between trendline resistance at $206.50 and trendline support or reaction lows near $180.00 over the intermediate term.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

Thiru Venkatam: Thiru Venkatam is a distinguished digital entrepreneur and online publishing expert with over a decade of experience in creating and managing successful websites. He holds a Bachelor's degree in English, Business Administration, Journalism from Annamalai University and is a certified member of Digital Publishers Association. The founder and owner of multiple reputable platforms - leverages his extensive expertise to deliver authoritative and trustworthy content across diverse industries such as technology, health, home décor, and veterinary news. His commitment to the principles of Expertise, Authoritativeness, and Trustworthiness (E-A-T) ensures that each website provides accurate, reliable, and high-quality information tailored to a global audience.
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