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Bristol Myers: Not without risk

Bristol Myers: Not without risk

22 February 2023

Another gem of the US pharmaceutical sector – Bristol Myers – attracts attention after the publication of data on the results of the fourth quarter of 2022.

The company is focused on the development and production of drugs in five key areas, including oncology and cardiology. Currently, Bristol Myers is engaged in the development of at least 50 drugs or substances based on them, 209 of them are in the final phase of clinical trials.

So, in the fourth quarter of 2022, the company achieved the following results:

  • revenue -5% YoY to $11.41 billion, above expectations;
  • net profit -20% YoY to $2 billion;
  • EPS of $1.82 per share, above forecasts.

The company suffered due to the loss of exclusivity of the Revlimid drug. However, sales of the vast majority of key drugs brought income: Opdivo (+11% YoY), Eliquis (+1% yoy).

Why such a “swing” in comparison with other pharmaceutical companies? There is always a risk of revocation or non-receipt of the patent, in this case it has been realized. At the same time, the company is clearly undervalued in comparison with competitors, besides, it has a serious range of potentially strong drugs.

The fulcrum for Bristol Myers is the dividend strategy. The company has been paying dividends for the last 33 years without disruption. The average dividend yield is estimated at 3.2-3.5%.

The main risk is to strengthen the position of Revlimid’s competitors.

The consensus forecast for Bristol Myers shares by the end of 2023 is $86-88.

On the daily trading chart of Bristol Myers shares, the MACD indicator is declining in the positive zone and gives a sell signal. The Stochastic oscillator has pushed off from the oversold zone and signals a purchase.

22 February 2023
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