Market Overview

The market outlook for the intermediate term remains bullish, with equity making up 70% and cash at 1% in portfolio strategy. Recent market movers include mixed global shares, with Oracle (ORCL) experiencing a drop due to EPS and revenue misses, while Alphabet (GOOGL) rises on news of a new chip, and AI sees an uptick due to results and Microsoft news.

Recent Research Review

A comprehensive review of companies such as Philip Morris (PM), Equifax (EFX), Brighthouse Financial (BHF), Clorox (CLX), Oshkosh Corporation (OSK), Simon Property Group (SPG), Salesforce (CRM), Stanley Works (SW), Interpublic Group (IPG), Omnicom Group (OMC), UnitedHealth Group (UNH), Edison International (EIX), Autodesk (ADSK), Axon Enterprise (AXON), Berkshire Hathaway (BRK/B), Pacific Gas and Electric Company (PCG), CrowdStrike (CRWD), Vulcan Materials Company (VMC), Kraft Heinz Company (KHC), and Chipotle Mexican Grill (CMG) were conducted for a detailed analysis.

Statistics Diary

The 12-month forecast for the S&P 500 is between 5000-6400, with current/next EPS at 247/276. The S&P 500 P/E is at 24.51, with a 12-month P/E range of 18.1 – 23.2. The 10-year yield is 4.20%, with a 12-month bond forecast of 3.50-4.50%. The current Fed Funds Target is 4.87%, with a 12-month forecast of 3.50-4.50%.

Biotech Industry Update

The biotech sector has stumbled, down 11% over the past three months, due to changes in leadership in Washington DC. The trend of underperformance can be attributed to a “risk-off” environment, elevated inflation, and increasing interest rates, impacting financing markets and the IPO window. Many biotech companies are trading below cash reserves, exploring strategic alternatives or bankruptcy, and facing scrutiny over drug pricing.

However, there is a positive outlook with new drugs entering the market. The FDA’s Center for Drug Evaluation and Research approved 55 new molecular entities in 2023, surpassing the 37 approvals in 2022. The Center for Biologics Evaluation and Research approved 16 biologic medicines, compared to 12 in the previous year. Recent approvals include a higher proportion of biologic drugs, with potential for greater innovation and R&D productivity.

Daily Spotlight: Amgen Inc.

Recommendation: Buy

Amgen Inc. has announced significant pipeline developments, including the Japanese approval of Tepezza for Thyroid Eye Disease and the U.S. launch of Otezla for plaque psoriasis in children and adolescents. The company also shared positive clinical data for Uplizna in treating generalized myasthenia gravis and advanced its study of MariTide, a multispecific molecule targeting gastric inhibitory polypeptide receptor and glucagon-like peptide 1 receptor. Amgen’s future revenue is expected to benefit from new drug launches, biosimilars, and strategic M&A and in-licensing.

About Argus Research Co.

Argus Research Co. is an independent investment research provider, falling under the Argus Investors’ Counsel, Inc., registered with the U.S. Securities and Exchange Commission. Argus provides insights based on reliable sources but makes no guarantee of accuracy or completeness. The report is for general information and does not cater to individual investment objectives or financial situations. It is advised to consult with an independent investment advisor for personalized advice.