Bristol Myers Squibb (NYSE: BMY) is scheduled to report its Q2 2022 results on Wednesday, July 27. We expect BMS to report revenue and earnings marginally above the consensus estimates. Although market share gains for Eliquis, Opdivo, and Reblozyl likely aided BMS’ sales growth in Q2, Revlimid sales are expected to trend lower with the availability of its biosimilar in the U.S. The company will likely see the expansion of its operating margins led by cost discipline. Although we expect the company to navigate well over the latest quarter, we find its stock fairly valued at its current levels, as discussed below. Our interactive dashboard analysis of Bristol Myers Squibb Earnings Preview has additional details.
(1) Revenues expected to be marginally above the consensus estimates
- Trefis estimates BMS’ Q2 2022 revenues to be around $11.5 billion, reflecting a low single-digit y-o-y decline, but marginally above the consensus estimate.
- A decline in Revlimid sales will likely more than offset higher sales for Eliquis, Opdivo, and Reblozyl.
- BMS secured the U.S. FDA approval for Opdualag and Camzyos earlier this year, strengthening its overall drug portfolio.
- Looking at Q1 2022, the company saw its sales grow 5% y-o-y to $11.6 billion. The growth primarily reflects the continued market share gains for Eliquis, which saw sales growth of 11% (y-o-y) to $3.2 billion.
- Our dashboard on Bristol Myers Squibb’s Revenues dashboard details the company’s segments.
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(2) EPS likely to be above the consensus estimates
- BMS’ Q2 2022 adjusted earnings per share is expected to be $1.86 per Trefis analysis, slightly above the consensus estimate of $1.83.
- The company’s adjusted net income of $4.2 billion in Q1 2022 reflected a 7% rise from its $4.0 billion figure in the prior-year quarter, led by sales growth and 450 bps gross margin expansion.
- The company expects its operating expenses to decline (y-o-y) in 2022, aiding its operating margin growth.
- For the full-year 2022, we expect the adjusted EPS to be higher at $7.60 than the EPS of $7.51 in 2021.
(3) BMY stock looks reasonably valued
- We estimate Bristol Myers Squibb’s Valuation to be around $80 per share, just 6% above the current market price of $76.
- At its current levels, BMY stock is trading at a P/E multiple of 10x based on our EPS estimate of $7.60 for 2022, compared to the last three-year average of 9x, implying that BMY stock is fairly valued currently.
- However, if the company reports upbeat Q2 results and provides an outlook better than the street estimates, the P/E multiple will likely be revised upward, resulting in higher levels for BMY stock.
While BMY stock looks fairly valued, it is helpful to see how Bristol Myers Squibb’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
Furthermore, the Covid-19 crisis 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 Mednax vs. Penske Automotive
Despite inflation rising and the Fed raising interest rates, BMY stock has risen 22% this year. But can it drop from here? See how low Bristol Myers Squibb stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
|S&P 500 Return||1%||-20%||71%|
|Trefis Multi-Strategy Portfolio||3%||-21%||214%|
 Month-to-date and year-to-date as of 7/18/2022
 Cumulative total returns since the end of 2016