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Msg  7002 of 7919  at  5/3/2021 11:51:40 AM  by

teflon2000


What Bristol Myers Squibbs Q1 Results Say About Its Stock

What Bristol Myers Squibbs Q1 Results Say About Its Stock
5:16 AM ET 5/3/21 | TREFIS

[Updated: 4/30/2021] BMY Stock Falls Post Q1

The stock price of Bristol Myers Squibb (NYSE:BMY) has seen a 5% drop over the last five trading days, after the company announced its Q1 results, which were slightly below the street estimates. Bristol's Q1 revenue of $11.1 billion was largely in-line with the consensus estimates, while its adjusted EPS of $1.74 per share was short of the $1.82 consensus estimate. The results were impacted by Covid-19 to some extent and we believe that the company will likely see strong sales growth over the coming quarters, led by market share gains for Eliquis, and recent approvals boding well for Opdivo and Yervoy.

That said, the investors weren't happy with Bristol's Q1 performance and the stock plunged 5% in a single trading session, post the earnings announcement. Now that half of the U.S. population has received at least one dose of vaccine, the economy is expected to open up gradually, signaling improvement for Bristol stock over the coming quarters.

Going by historical performance, there is a 62% chance of a rise in BMY stock over the next month. Out of 116 instances in the last ten years that BMY stock saw a five-day decline of 5.2% or more, 72 of them resulted in BMY stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 72 out of 116, or about a 62% chance of gain in BMY stock over the coming month. Furthermore, Bristol has kept its adjusted earnings guidance unchanged for the full year, and we also maintain Bristol Myers Squibb's Valuation of $80, based on an EPS estimate of $7.55 and a P/E multiple of 11x in 2021, reflecting a 26% premium to the current market price of around $63.

At the current market price of $63, BMY stock is now trading at just 8x its 2021 EPS estimate of $7.55. The 8x figure compares with levels of over 13x seen in 2018 and 2019, and a 10x figure seen as recently as late 2020. We continue to believe that BMY stock is undervalued and it can offer high returns going forward.

 


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