It is no secret that health care companies, particularly biotech, have been under pressure. Some of these stocks may have even become oversold. Independent research firm Argus has reviews of three of health care picks from its own Focus List in which it still sees significant upside ahead.
Argus still has an Overweight rating on health care stocks in general. With a weighting of just over 15% of the S&P 500, the recent selling pressure may be an opportunity for more nimble investors who don’t get caught up in quick rounds of pressure.
Argus thinks that the group can continue to benefit from its perceived insulation from economic turbulence. The larger pool of insured people under the Affordable Care Act should support further gains.
Tuesday’s report for the health care sector sees what was a prior outperformance continuing ahead. Argus sees health care fundamentals being reasonable, with general sector debt ratios being low.
Amgen Inc. (NASDAQ: AMGN) was shown to have solid growth prospects, and the company was said to be doing a good job of launching its next generation of blockbuster drugs: Krypolis, Prolia, XGEVA and now Corlanor.
Another boost is that Amgen’s pipeline appears promising via drugs for high cholesterol and multiple myeloma. Even after the dividend was raised by 30%, Argus thinks more dividend hikes are in store. Amazingly, it has a $194 price target — almost $60 higher than now and almost $10 higher than the consensus target.
Amgen shares were last seen up 3% at $136.00, with a consensus price target of almost $186 and a 52-week trading range of $127.67 to $181.81. Amgen’s market cap is still just over $100 billion, even after the big pullback.