DCF Studio

    AMGN · NMS · Healthcare

    Amgen Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 247.40

    Market price

    USD 465.45

    Implied upside

    -46.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages 3.96% of revenue against depreciation of 14.55%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 14.55% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Current EV/EBITDA of 20.9x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 247.40-46.8%
    Exit multiple
    USD 456.09-2.0%
    Market price
    USD 465.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn9bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 39.0bnUSD 40.4bnUSD 41.8bnUSD 43.2bnUSD 44.6bnUSD 46.0bnUSD 47.4bnUSD 48.7bnUSD 50.0bnUSD 51.2bn+3.1%
    EBITUSD 10.8bnUSD 11.2bnUSD 11.6bnUSD 12.0bnUSD 12.4bnUSD 12.7bnUSD 13.1bnUSD 13.5bnUSD 13.8bnUSD 14.2bn+3.1%
    NOPATUSD 9.4bnUSD 9.8bnUSD 10.1bnUSD 10.5bnUSD 10.8bnUSD 11.1bnUSD 11.5bnUSD 11.8bnUSD 12.1bnUSD 12.4bn+3.1%
    Add depreciation & amortisationUSD 5.7bnUSD 5.9bnUSD 6.1bnUSD 6.3bnUSD 6.5bnUSD 6.7bnUSD 6.9bnUSD 7.1bnUSD 7.3bnUSD 7.5bn+3.1%
    Less capital expenditureUSD -5.7bnUSD -6.1bnUSD -6.6bnUSD -7.1bnUSD -7.6bnUSD -8.1bnUSD -8.6bnUSD -9.1bnUSD -9.7bnUSD -10.2bn+6.8%
    Capex, % of revenue14.6%15.2%15.8%16.4%17.0%17.6%18.2%18.8%19.4%20.0%-
    Less increase in working capitalUSD -799.7mUSD -514.4mUSD -512.1mUSD -508.2mUSD -502.7mUSD -495.5mUSD -486.7mUSD -476.1mUSD -463.9mUSD -450.0m-6.2%
    Free cashflow to firmUSD 8.6bnUSD 9.0bnUSD 9.1bnUSD 9.2bnUSD 9.2bnUSD 9.2bnUSD 9.3bnUSD 9.2bnUSD 9.2bnUSD 9.2bn+0.7%
    Discount factor0.96660.90300.84360.78810.73630.68790.64260.60030.56090.5240-
    Present valueUSD 8.3bnUSD 8.1bnUSD 7.7bnUSD 7.2bnUSD 6.8bnUSD 6.4bnUSD 5.9bnUSD 5.5bnUSD 5.2bnUSD 4.8bn-
    Present Value Of The ForecastUSD 66.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.609Reported 0.417, pulled toward 1.0 (Blume)
    Cost of equity7.47%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 3.3x interest cover. Book interest / average debt was lower, at 4.8%.
    Market capitalisationUSD 251.6bn82.2% of capital
    Total debtUSD 54.6bn17.8% of capital, book value as a proxy
    Tax rate12.7%Effective, capped at statutory
    WACC7.04%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 247.40

    63% of EV

    Forecast FCFF, final year
    USD 9.2bn
    Capex at depreciation, working capital in reinvestment
    USD 12.4bn
    Less reinvestment at g/ROIC (22.5% of NOPAT)
    USD -2.8bn
    Capitalised
    USD 9.6bn
    ROIC (reported)
    11.1%
    Terminal value, undiscounted
    USD 216.8bn
    Terminal value, discounted
    USD 113.6bn
    Enterprise value
    USD 179.6bn
    Less net debt
    USD 45.5bn
    Equity value
    USD 134.1bn

    Exit at 20.0x EBITDA

    Value per shareUSD 456.09

    77% of EV

    Terminal value, undiscounted
    USD 432.7bn
    Terminal value, discounted
    USD 226.7bn
    Enterprise value
    USD 292.7bn
    Less net debt
    USD 45.5bn
    Equity value
    USD 247.2bn

    Spread between methods: 59%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.04%410.86446.34496.88573.55701.80
    6.04%302.68317.37336.95363.83402.33
    7.04%233.60239.57247.39257.76271.77
    8.04%185.70187.52190.10193.66198.51
    9.04%150.53150.26150.28150.68151.54

    Outlined: this model. Green text: above today's price of 465.45. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year11.8%3.4%9.8%
    EBIT margin36.3%27.7%45.5%
    Discount rate-7.0%5.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.