Will Bristol Myers Squibb Stock Rise Post Q1?

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Bristol Myers Squibb

Bristol Myers Squibb (NYSE: BMY) is scheduled to report its Q1 2023 results on Thursday, April 27. We expect BMY stock to trade higher, with its revenue and earnings coming in marginally above the street estimates. Although the company should benefit from continued market share gains for Eliquis, Opdivo, and Reblozyl, an expected decline in Revlimid sales due to biosimilar competition will likely weigh on the overall sales growth. BMY stock is down 2% this year, underperforming the broader indices, with the S&P500 index rising 8%. However, we find BMY stock to have ample room for growth, 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’ Q1 2023 revenues to be around $11.6 billion, reflecting a 1% y-o-y decline and slightly above the consensus estimate of $11.5 billion.
  • A decline in Revlimid and Abraxane sales will likely offset sales growth for Eliquis, Opdivo, and Orencia.
  • BMS is likely to see a continued surge in sales for its relatively new drugs – Reblozyl, Abecma, and Zeposia – among others, driven by market share gains.
  • However, forex headwinds will likely weigh on the company’s top-line growth.
  • Looking at Q4 2022, the company saw its revenue fall 5% y-o-y to $11.4 billion. Its In-Line products sales were up 4%, while Recent LOE Products (refers to drugs that have lost market exclusivity) sales were down 33%.
  • Our dashboard on Bristol Myers Squibb’s Revenues details the company’s segments.
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(2) EPS likely to be above the consensus estimates

  • BMS’ Q1 2023 adjusted earnings per share is expected to be $2.00 per Trefis analysis, slightly above the consensus estimate of $1.97. This compares with the $1.96 figure reported in the prior-year quarter.
  • The company’s adjusted net income of $3.9 billion in Q4 2022 reflected a 6% fall from its $4.1 billion figure in the prior-year quarter, primarily due to lower revenues.
  • For the full-year 2023, we expect the adjusted EPS to be $8.08, compared to $7.70 in 2022.

(3) BMY stock looks like it has more room for growth

  • We estimate Bristol Myers Squibb’s Valuation to be around $80 per share, about 13% above the current market price of $70.
  • At its current levels, BMY stock is trading at a little under 9x P/E multiple based on our EPS estimate of $8.08 for 2023, compared to its last five-year average of 10x, implying that BMY stock has some room for growth.
  • If the company reports upbeat Q1 results and provides a 2023 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 like it can see higher levels, 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

Given higher inflation and the Fed raising interest rates, BMY stock has seen a 2% fall this year. Can it drop more? 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 Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 BMY Return 2% -2% 21%
 S&P 500 Return 1% 8% 85%
 Trefis Multi-Strategy Portfolio 1% 9% 244%

[1] Month-to-date and year-to-date as of 4/25/2023
[2] Cumulative total returns since the end of 2016

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