Amgen's Price Target Reduced, Maintain Buy Rating Following Strong Q1 Performance
Rewritten Article
The Q1 earnings season is cruising along just fine. As of last Friday, a whopping 72% of companies from the S&P 500 that have reported their earnings have managed to outdo expectations. Although this percentage is a tad below the long-term average, the overall earnings year-on-year advance now clocks in at 12.8%, which is a solid 5 percentage points above where it started.
Digging a bit deeper, the current earnings growth rate may seem impressive, but it's actually a far cry from earlier forecasts, which predicted a robust 11.5% growth. More worryingly, it pales in comparison to the 18.2% growth we saw in Q4 2024. In other words, this represents the slowest pace in five quarters.
When it comes to individual company performance, early reporters show that 71% of them are beating earnings per share (EPS) estimates, a figure that slightly exceeds the long-term average beat rate. However, the aggregate earnings are projected at a somewhat disappointing $507 billion, down 9% year-over-year, making it the weakest since 2020.
In the current economic climate, companies are under increased scrutiny for their outlooks due to escalating policy risks and waning optimism. As a result, analysts have slashed their full-year 2025 growth expectations from a confident 14.2% to a more conservative 10–11.2%. This downward revision reflects the deteriorating business conditions that are causing widespread concern.
To put things into perspective, while beats are generally in line with historical trends, the sharp downward revision trajectory we're seeing this season exceeds typical seasonal adjustments. This trend aligns with falling valuations, as the S&P 500’s P/E ratio has retreated amid policy uncertainty. Although earnings growth remains positive, the pace and revision magnitude signal a degree of caution that goes beyond what we've seen in recent years.
- The current earnings year-on-year advance in the Q1 earnings season is at 12.8%, which is higher than the start but below earlier forecasts and slower compared to Q4 2024.
- The aggregate earnings are projected to be $507 billion, down 9% year-over-year, marking the weakest since 2020.
- Analysts have revised their full-year 2025 growth expectations downwards from 14.2% to a range of 10-11.2%, reflecting the deteriorating business conditions causing widespread concern.
- Earnings growth remains positive, but the pace and revision magnitude this season, including the falling valuations, signal a degree of caution beyond recent years in the finance and investing business.
