Amgen raised to Outperform on 'promising pipeline': 4 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed today: upgrades at Amgen, Sunrun, American International Group, and Rockwell Automation.

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Amgen earns an upgrade at BMO Capital

BMO Capital upgraded Amgen (NASDAQ:AMGN) to Outperform from Market Perform and raised its price target to $326.00 from $286.00.

The analysts noted that the upgrade is based on several key factors:

• Amgen's emerging oral and injectable metabolic pipeline presents an attractive investment opportunity in the obesity metabolic market without the same premium as peers;
• The completion of the Horizon deal is seen as a strategic move to offset revenues lost to base business erosion;
• Amgen's promising pipeline, with numerous potential catalysts through 2024, is expected to foster further expansion of its multiple.

Sunrun gains on Piper Sandler upgrade

Sunrun (NASDAQ:RUN) shares gained more than 2% pre-market today after Piper Sandler upgraded the company to Overweight from Neutral and raised its price target to $31.00 from $15.00, as reported in real-time on InvestingPro.

The upgrade comes despite previous concerns regarding the performance of installer equities in the context of rapidly increasing interest rates. Historically, higher interest rates have negatively impacted both the demand for these companies' services and their ability to raise capital through non-recourse financing, while also affecting the valuation of their existing and potential assets. During the third quarter of 2023, the industry's cost of capital was estimated at around 8%, compared to a 5% benchmark, with the equities reflecting a higher discount rate. However, benchmark rates have since decreased by more than 100 basis points, suggesting a potential reduction in the cost of capital to below 7%, assuming no change in credit spreads.

We also believe there is a downward bias to ABS credit spreads (perhaps to 200bps+ from 300bps+ in 2023). We see the potential for lower benchmark rates and lower spreads to eventually push RUN’s cost of capital back to 6.0% within the coming quarters.

Two more upgrades

BMO Capital upgraded American International Group (NYSE:AIG) to Outperform from Market Perform with a price target of $83.00. As a result, shares gained more than 1% pre-market today.

Rockwell Automation (NYSE:ROK) shares rose more than 1% pre-market today after Wells Fargo upgraded the company to Overweight from Equal Weight with a price target of $357.00.

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