Up 15% In A Month Will Bristol Myers Squibb Stock Continue To See Higher Levels?

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BMY: Bristol Myers Squibb logo
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Bristol Myers Squibb

Bristol Myers Squibb stock (NYSE: BMY) is up 15% in a month, slightly outperforming the broader S&P500 index, up 11%. The rise in BMY stock can be attributed to the upbeat Q3 earnings it reported in late October. Its top line was marginally below, but earnings were well above our estimates, driven by operating margin expansion.

Bristol Myers Squibb’s revenue of $11.2 billion reflected a 3% y-o-y decline, marginally below our $11.3 billion estimate, as higher sales for Eliquis, Opdivo, and Reblozyl were more than offset by a sharp decline in Revlimid sales due to biosimilar competition. Foreign exchange headwinds also weighed on the top-line growth. However, its earnings of $1.99 on a per share and adjusted basis was up 3% y-o-y, partly due to around a 110 bps rise in operating margin.

Despite the forex headwinds, the company upheld its full-year sales forecast to be around $46 billion and the earnings outlook to be in the range of $7.44 to $7.74 on a per share and adjusted basis. We have updated our model to reflect the latest quarterly results. We forecast revenue of $46 billion and adjusted earnings of $7.64 per share, in line with the company’s guidance. We estimate Bristol Myers Squibb’s Valuation to be around $80 per share, which aligns with the current market price. At its current levels, BMY stock is trading at a 10x P/E multiple based on its expected EPS of $7.64 in 2022, compared to the last three-year average of 9x, implying that the stock is fairly valued.

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But What About The Near Term?

Now that BMY stock has seen a 15% rise in a month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a lower chance of an increase in BMY stock over the next month. BMY stock has seen a move of 15% or more 47 times in the last ten years. 22 of those resulted in BMY stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 22 out of 47, or a 47% chance of a rise in BMY stock over the coming month. See our analysis on Bristol Myers Squibb Stock Chance of Rise for more details.

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

  • After moving 1.1% or more over five days, the stock rose on 55% of the occasions in the next five days.
  • After moving 6.4% or more over ten days, the stock rose in the next ten days on 56% of the occasions
  • After moving 14.6% or more over a twenty-one-day period, the stock rose on 47% of the occasions in the next twenty-one days.

This pattern suggests a higher chance of a rise in BMY stock over the next five and ten days but a lower chance of a rise in the next twenty-one days.

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

  • Five-Day Return: MRK highest at 3.2%; NVO lowest at -7.9%
  • Ten-Day Return: BMY highest at 6.4%; NVO lowest at -1.7%
  • Twenty-One Days Return: BMY highest at 14.6%; NVO lowest at 0.8%

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 27% 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.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 BMY Return 2% 27% 36%
 S&P 500 Return 2% -17% 77%
 Trefis Multi-Strategy Portfolio 4% -19% 222%

[1] Month-to-date and year-to-date as of 11/11/2022
[2] Cumulative total returns since the end of 2016

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