What’s Happening With Bristol Myers Squibb Stock?

[Updated: Jan 7, 2022] BMY Stock Rise

Last month we discussed that there are good chances of a rise in Bristol Myers Squibb (NYSE:BMY) stock based on its historical performance. BMY stock is up 8% over the last month, primarily driven by increased investor interest after the company announced a 10% increase in its quarterly dividend, and that it is boosting its share repurchase program by $15 billion. ^[1] This move has boded well with the investors, evident from BMY’s stock price appreciation.

Later, the company also announced that the U.S. FDA has approved Orencia in a combination for the prevention of Acute Graft Versus Host Disease (aGvHD). The drug is already approved for the treatment for Rheumatoid Arthritis and Psoriatic Arthritis. Note that Orencia is a blockbuster drug for Bristol Myers Squibb with sales of over $3 billion in 2020, and they were up 7% y-o-y to $2.4 billion for the nine month period ending Sep 2021. While the label expansion is good for Orencia, its method-of-use patent expired in 2021. That said, there is no biosimilar competition for Orencia currently, and its formulation patents do not expire until 2026. Our Bristol Myers Squibb Revenue dashboard provides more details on the company’s segments.

Now, although these recent developments have been positive for BMY stock, we believe that it is still undervalued at its current levels. Going by our Bristol Myers Squibb Valuation of $79 per share, based on $7.82 expected EPS in 2022 and a P/E multiple of 10x, there is more than 25% upside potential for BMY stock from its current levels of $61. Even if were to look at the average price estimate of $73 per the analysts forecasts, it reflects a large 20% upside for BMY stock.

Looking at the near term, it appears that BMY stock is likely to see higher levels. Going by its historical performance, there is a higher chance of a rise in BMY stock over the next month. Out of 286 instances in the last ten years that BMY stock saw a twenty-one day rise of 8% or more, 161 of them resulted in BMY stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 161 out of 286, or about 56% chance of a rise in BMY stock over the coming month, implying that BMY stock may see higher levels in the near term. See our analysis on Bristol Myers Squibb Stock Chance of A Rise for more details.

Below you’ll find our previous coverage of BMY stock where you can track our view over time.

[Updated: Dec 2, 2021] BMY Stock Decline

The stock price of Bristol Myers Squibb (NYSE:BMY) has seen a decline of 8% over the last month, while it is down 6% over the last week. This can partly be attributed to a larger decline in the broader markets with the S&P 500 also falling over 3% last week, following the rising concerns over the new Covid-19 variant – Omicron. Investors are now concerned that if there is another large spike in Covid-19 cases from the new variant, it will disrupt economic recovery and impact sales as well as earnings growth of various companies.

Separately, Bristol Myers Squibb recently announced that the U.S. FDA has accepted its new drug application for psoriasis-treatment – Deucravacitinib. The European regulator also validated the marketing authorization application for this drug. This is a positive development for the company, as Deucravacitinib is expected to be a blockbuster drug with peak sales expected to be north of $4 billion.

But now that BMY stock has fallen 8% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a good chance of a rise in BMY stock over the next month. Out of 243 instances in the last ten years that BMY stock saw a twenty-one day fall of 8% or more, 168 of them resulted in BMY stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 168 out of 243, or about a 69% chance of a rise in BMY stock over the coming month. See our analysis on Bristol Myers Squibb Stock Chances of Rise for more details.

While BMY stock may see a rebound going forward, it is helpful to see how its peers stack up. Check out Bristol Myers Squibb Stock Comparison With Peers to see how BMY stock compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

Now, if we were to look at growth over the next few years, Bristol Myers Squibb surely will face some headwinds starting next year given the expected biosimilar competition for its top selling drug – Revlimid –which accounts for 28% of the company’s total sales. That said, BMY stock looks undervalued at its current levels of $55. Going by our Bristol Myers Squibb Valuation of $79 per share, based on $7.52 expected adjusted EPS and around 10x P/E multiple for 2021, there is an upside potential of 45% from its current levels. The 10x figure is in-line with the 10x levels seen as recently as late 2020, and it is lower than 13x levels seen in late 2018 and 2019.

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

• After moving -6.0% or more over a five-day period, the stock rose in the next five days on 52% of the occasions.
• After moving -10.0% or more over a ten-day period, the stock rose in the next ten days on 57% of the occasions
• After moving -8.2% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 69% of the occasions.

This pattern suggests that BMY stock may see higher levels over the next five to ten days, as well as over the next one month.

Bristol Myers Squibb (BMY) Stock Return (Recent) Comparison With Peers

• Five-Day Return: PFE highest at 4.9%; MRK lowest at -8.2%
• Ten-Day Return: PFE highest at 8.2%; MRK lowest at -10.5%
• Twenty-One Days Return: PFE highest at 22.8%; MRK lowest at -14.9%

Wondering why Merck stock is falling? Look at – What’s Next For Merck Stock After FDA Advisors Back Its Covid-19 Pill? – for more details.

While BMY stock may see higher levels, 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 Merck vs. Qorvo.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

[1] Month-to-date and year-to-date as of 1/7/2022
[2] Cumulative total returns since the end of 2016

1. Bristol Myers Squibb Press Release, Dec 13, 2021 [↩]