What happened
Amgen (AMGN 0.22%) stock came under renewed pressure on Monday, several days after more regulators piled on to block a major acquisition announced by the company. The immediate catalyst was a price-target cut made by an analyst before market open. As a result, Amgen's share price sank by slightly over 1%, which was more than double the percentage-rate decline of the S&P 500 index on the day.
So what
The person taking the scissors to his Amgen price target was Argus Research's David Toung. His new level is $260 per share, down from the previous $270. He's clearly not ready to give up on the company yet, though, as he maintained his buy recommendation on the stock.
It wasn't immediately apparent why Toung shaved $10 off his price target, but it's almost certain that Amgen's recent regulatory struggles had something to do with it.
The resistance to the company's attempted buyout of peer healthcare company Horizon Therapeutics (HZNP) is growing. Last Thursday, six U.S. states joined a lawsuit brought by the Federal Trade Commission (FTC) to block the deal. Under the terms of the arrangement, which was announced last December, Amgen is to acquire Horizon for nearly $28 billion.
Now what
Savvy investors are aware that analyst moves aren't make-or-break events for stocks. They should evaluate companies their own way and draw their own conclusions.
Yet any pullback in sentiment on Amgen is understandable. Six is a big number of states to be joining a federal agency's lawsuit, and among that group are the large and ever-influential California and New York. (The others are Wisconsin, Minnesota, Illinois, and Washington.)
