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Amgen Inc. (AMGN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Amgen Inc. (AMGN)

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Intrinsic Value (DCF)

Current$330.03
→
Intrinsic$287.39
-13%
$163.97$287.39$533.06
Market implies 11% growth for 5 years
AMGN appears fairly valued — current price aligns with our DCF estimate.
At $330, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $164 → Bull $533. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$371$413$459$507
10%$229$257$287$320
12%$154$175$197$221
14%$107$124$141$160

Bull Case

  • Bull case ($533) offers 62% upside at 10% growth, 8% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($164) implies 50% downside at 6% growth, 12% discount
  • Price reflects 11% growth expectations vs 8% historical — high bar to clear
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5-Year Free Cash Flow Projection

Year 1$11.23B
Year 2$12.12B
Year 3$13.09B
Year 4$14.14B
Year 5$15.27B
Terminal$242.01B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$10.39BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is AMGN stock undervalued or overvalued?
🟡 FAIRLY VALUED

AMGN trades at $330.03, within 10% of our $287.39 intrinsic value estimate. At 9.5% WACC and 8.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $178.92 (bear) to $437.44 (bull).

What is AMGN's intrinsic value?

Using a 5-year DCF model: Base FCF of $10.39B, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $48.13B net debt and dividing by 0.54B shares: Bear $178.92 | Base $287.39 | Bull $437.44. Current price $330.03 implies -13% to base case.

How is AMGN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($203.60B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 19.6x.