Stock of the Day

July 31, 2023

Bristol Myers Squibb (BMY)

$60.51
+$1.23 (+2.1%)
Market Cap: $121.09B

About Bristol Myers Squibb

Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases. The company's products include Eliquis for reduction in risk of stroke/systemic embolism in non-valvular atrial fibrillation, and for the treatment of DVT/PE; Opdivo for various anti-cancer indications, including bladder, blood, CRC, head and neck, RCC, HCC, lung, melanoma, MPM, stomach and esophageal cancer; Pomalyst/Imnovid for multiple myeloma; Orencia for active rheumatoid arthritis and psoriatic arthritis; and Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia. It also provides Yervoy for the treatment of patients with unresectable or metastatic melanoma; Empliciti for the treatment of multiple myeloma; Abecma for the treatment of relapsed or refractory multiple myeloma; Reblozyl for the treatment of anemia; Opdualag for the treatment of unresectable or metastatic melanoma; and Zeposia to treat relapsing forms of multiple sclerosis. In addition, the company offers Breyanzi for the treatment of relapsed or refractory large B-cell lymphoma; Onureg for the treatment of AML; Inrebic for the treatment of myelofibrosis; Camzyos for the treatment of symptomatic obstructive HCM to enhance functional capacity and symptom; Sotyktu for the treatment of moderate-to-severe plaque psoriasis; Augtyro for the treatment of locally advanced or metastatic ROS1-positive NSCLC; Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma; and Abraxane to treat breast cancer, NSCLC and pancreatic cancer. It sells products to wholesalers, distributors, pharmacies, retailers, hospitals, clinics, and government agencies. The company was formerly known as Bristol-Myers Company. Bristol-Myers Squibb Company was founded in 1887 and is headquartered in Princeton, New Jersey.

Bristol Myers Squibb Bull Case

Here are some ways that investors could benefit from investing in Bristol-Myers Squibb:

  • Bristol-Myers Squibb recently announced positive Phase 3 data for Zenbexus (iberdomide), which demonstrated superior progression-free survival compared to standard of care in relapsed and refractory multiple myeloma, strengthening the company's pipeline and providing a potential future growth driver in a competitive market.
  • The company reported strong third-quarter earnings, beating consensus estimates with $2.04 in earnings per share against an expected $1.60, and revenue of $12.97 billion, which exceeded the consensus estimate of $11.74 billion, indicating robust operational performance and top-line growth of 5.7% year-over-year.
  • Investors can benefit from a high dividend yield of 4.23%, with the company recently declaring a quarterly dividend of $0.63 per share, offering a substantial income stream that is supported by a payout ratio of 55.51%, which leaves room for financial flexibility.
  • The stock is currently trading at $59.51, which is below the average analyst price target of $66.72 and significantly below the 52-week high of $68.64, suggesting potential upside for investors as the consensus rating stands at Moderate Buy with multiple analysts raising their targets recently.
  • Bristol-Myers Squibb is experiencing growth from newer medicines such as Reblozyl, which is helping to offset declines from older products, and the company recently secured a label expansion for Camzyos, broadening the commercial opportunity for these newer therapies.

Bristol Myers Squibb Bear Case

Investors should be bearish about investing in Bristol-Myers Squibb for these reasons:

  • Analysts continue to highlight patent-cliff concerns, noting that patent expirations and declining sales of legacy drugs could pressure revenue, making the successful launch of new products and pipeline development critical for maintaining financial health.
  • Cantor Fitzgerald recently lowered its price target for Bristol-Myers Squibb from $59.00 to $53.00 and maintained a neutral rating, signaling limited near-term upside in its view, while Morgan Stanley issued a Sell rating, indicating significant bearish sentiment from some major financial institutions.
  • Adoption of Sotyktu for psoriatic arthritis is developing unevenly, as rheumatologists cite limited experience, access hurdles, and questions about joint efficacy, which are restraining the launch momentum of this newer therapy despite its differentiation in the market.
  • The company has a high debt-to-equity ratio of 1.89, which indicates a significant level of leverage relative to its equity, potentially increasing financial risk and limiting the company's ability to take on additional debt for future acquisitions or R&D investments.
  • Short interest in the stock has been increasing, with shares shorted rising to 41,969,577 in the most recent reporting period, representing a short percentage of float of approximately 2.06%, which suggests that a notable portion of the market is betting against the stock's future performance.
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