Stock Bristol Myers Squibb (NYSE: BMY) is up 15% in one month, slightly outperforming the broader S&P500 index, up 11%. The rise in BMY stock can be attributed to upbeat third-quarter results released in late October. Its revenue was slightly lower, but its profits were well above our estimates, thanks to the expansion of the operating margin.
Bristol Myers Squibb turnover of $11.2 billion reflects a 3% year-over-year decline, slightly lower than our estimate of $11.3 billion, as higher sales of Eliquis, Opdivo and Reblozyl were more than offset by a sharp decline in sales of Revlimid due to competition from biosimilars. Exchange rate headwinds also weighed on revenue growth. However, its earnings of $1.99 per share and on an adjusted basis rose 3% year-on-year, in part due to a roughly 110 basis point increase in operating margin.
Despite the forex headwinds, the company maintained its full-year sales guidance of around $46 billion and earnings outlook of between $7.44 and $7.74 per share and on an adjusted basis. We have updated our model to reflect the latest quarterly results. We expect revenue of $46 billion and adjusted earnings of $7.64 per share, in line with the company’s guidance. We estimate Bristol Myers Squibb Review at around $80 per share, which is the current market price. At current levels, BMY stock is trading at a P/E multiple of 10x based on its expected EPS of $7.64 in 2022, compared to the past three-year average of 9x, implying that the action is fairly valued.
But what about the short term?
Now that BMY stock is up 15% in a month, will it continue its upward trajectory or is a fall imminent? Based on historical performance, there are less chance of BMY stock increase over the next month. BMY stock has moved 15% or more 47 times in the past ten years. 22 of them caused BMY shares to rise over the subsequent one-month period (twenty-one trading days). This historical trend reflects 22 out of 47, or a 47% chance of a rise in BMY stock in the coming month. See our analysis on Bristol Myers Squibb Stock Upside Chance for more details.
Calculation of “probability of event” and “chance of upside” using data from the last ten years
- After moving 1.1% or more over five days, the stock rose 55% of times over the next five days.
- After moving 6.4% or more over ten days, the stock rose over the next ten days on 56% of the occasions
- After moving 14.6% or more over a twenty-one day period, the stock rose 47% of the times over the following twenty-one days.
This pattern suggests a higher probability of a rise in BMY stock over the next five and ten days, but a lower probability of a rise over the next twenty-one days.
(Recent) comparison of Bristol Myers Squibb stock performance with its peers and the S&P500
- Five-day return: MRK high at 3.2%; NVO
the lowest at -7.9%
- Ten-Day Return: Highest BMY at 6.4%; NVO low at -1.7%
- Twenty-one day return: Highest BMY at 14.6%; Lowest NVO at 0.8%
Although BMY stock looks fairly valued, it’s worth seeing how Bristol Myers Squibb peers price on the measures that matter. You will find other useful comparisons for companies in all sectors on Peer comparisons.
In addition, the Covid-19 crisis has created many price discontinuities which can offer attractive business opportunities. For example, you’ll be surprised how counter-intuitive stock valuation is to Mednax vs. Penske Automotive
Despite rising inflation and the Fed raising interest rates, BMY stock is up 27% this year. But can he fall from here? See how low Bristol Myers Squibb stock can go by comparing its drop in previous stock market crashes. Here is a summary of how all stocks performed during previous stock market crashes.
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