What’s Next For Bristol Myers Squibb Stock After An 11% Fall In A Month?

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[Updated: Sep 27, 2021] BMY Stock Update

Last month, we discussed that Bristol Myers Squibb (NYSE: BMY) stock price could rebound over a one-month period after falling 4% in a week, based on its historical performance. However, BMY stock has seen a decline of over 10% since then, and it is down 11% over the last month (twenty-one trading days). The recent decline can be attributed to rising concerns over the Biden administration’s plan to reduce healthcare costs, including negotiating the drug prices in its Medicare program. This has resulted in a sell-off in some of the large pharmaceutical stocks, including Pfizer, Merck, and Johnson & Johnson, among others. Also, there are concerns of declining sales for Revlimid as its biosimilars are expected to hit the markets next year, and their impact will be more profound from 2026, when the makers of biosimilars will be able to freely sell the cheaper version of the drug.

But now that BMY stock has seen a 11% fall over the last month or so, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a high chance of a rebound in BMY stock over the next month. Out of 117 instances in the last ten years that BMY stock saw a twenty-one day fall of 11% or more, 84 of them resulted in BMY stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 84 out of 117, or about a 72% chance of a rise in BMY stock over the coming month, implying that the stock may rebound in the near term. See our analysis on Bristol Myers Squibb Stock Chance of Rise for more details.

Also, you can understand how Bristol Myers Squibb revenues have changed over the years along with trends in revenues for its closest peers in a separate dashboard analysis.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving -1.8% or more over a five-day period, the stock rose in the next five days on 53% of the occasions.
  • After moving -4.6% or more over a ten-day period, the stock rose in the next ten days on 47% of the occasions
  • After moving -11% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 72% of the occasions.

Predict average return on Bristol Myers Squibb (BMY) Stock Return: AI Predicts BMY Average and Excess Return After a Fall or Rise

Bristol Myers Squibb (BMY) Stock Return (Recent) Comparison With Peers And S&P500

  • Five-Day Return: MRK highest at 2.7%; BMY lowest at -1.8%
  • Ten-Day Return: NVO highest at 1.2%; BMY lowest at -4.6%
  • Twenty-One Day Return: SPY highest at -1.1%; LLY lowest at -12%

 

[Updated: Aug 30, 2021] BMY Stock Decline

The stock price of Bristol Myers Squibb (NYSE: BMY) has seen a 4% drop over the last five trading sessions led by a recent sell-off in large-cap pharmaceutical stocks over the past week or so, with Johnson & Johnson, Pfizer, and Merck also falling over 3% each. Looking at a little longer time period, BMY stock is up only 9% year-to-date. This compares with 22% gains seen for the S&P500.

BMY’s performance is largely in-line with the big pharmaceutical stocks, except for PFE which has outperformed both its peers and the S&P500 – owing to its Covid-19 vaccine sales. Pharmaceutical companies are impacted by the current pandemic, which has resulted in lower sales for drugs. That said, the sales have begun to rebound over the recent quarters. In fact, the company’s Q2 results were better than the street estimates. But now, given the recent decline, will BMY stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent?

According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for BMY stock average around 2% in the next one-month (twenty-one trading days) period after experiencing a 4% drop over the previous week (five trading days), implying that the stock will likely rebound in the near term.

There have been some positive developments for Bristol Myers Squibb as well, including the EU approval for Abecma – the First Anti-BCMA CAR T Cell Therapy – for relapsed and refractory multiple myeloma. Abecma was also approved by the U.S. FDA in March earlier this year. For perspective, the peak sales for Abecma are expected to be north of $2 billion. Recently, the company has also filed for a supplemental biologics license application with the US FDA for its blockbuster drug, Orencia, currently approved for certain forms of arthritis. Bristol Myers Squibb is now seeking approval for the prevention of moderate to severe acute graft versus host disease (aGvHD). The newly filed application is under priority review with a decision likely later this year. These developments are likely to bode well for BMY stock in the near term, in our view.

But how would the returns fare if you are interested in holding BMY stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Bristol Myers Squibb stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF BMY stock moved by -5% over five trading days, THEN over the next twenty-one trading days BMY stock moves an average of 2.3%, with a reasonable 62% probability of a positive return over this period.

Some Fun Scenarios, FAQs & Making Sense of Bristol Myers Squibb Stock Movements:

Question 1: Is the average return for Bristol Myers Squibb stock higher after a drop?

Answer: Consider two situations,

Case 1: Bristol Myers Squibb stock drops by -5% or more in a week

Case 2: Bristol Myers Squibb stock rises by 5% or more in a week

Is the average return for Bristol Myers Squibb stock higher over the subsequent month after Case 1 or Case 2?

BMY stock fares better after Case 1, with an average return of 2.3% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 1.2% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Bristol Myers Squibb stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Bristol Myers Squibb stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For BMY stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Bristol Myers Squibb after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

It’s pretty powerful to test the trend for yourself for Bristol Myers Squibb stock by changing the inputs in the charts above.

While BMY stock may see a rebound, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Abbott vs. Corcept.

 

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