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On Tuesday, Cantor Fitzgerald initiated coverage on Bristol-Myers Squibb Co. (NYSE:BMY) with a Neutral rating and a price target of $55.00. The new assessment reflects a cautiously optimistic view of the company’s prospects, particularly following the approval of its schizophrenia drug Cobenfy and the setbacks faced by competitors in the muscarinic receptor drug category. According to InvestingPro data, BMY maintains a solid financial health score of "GOOD" and boasts a significant market capitalization of nearly $100 billion.
The firm acknowledged improvements in Bristol-Myers Squibb’s underlying fundamentals, which could lead to top-line growth by the year 2030. The analysis also highlighted a potential stabilization in the company’s margin and earnings per share (EPS) profile due to clarity on the impacts from the Inflation Reduction Act (IRA) on Eliquis, a leading anticoagulant drug, and a new round of cost-cutting measures. The company has demonstrated strong revenue growth of 7.32% over the last twelve months, with an impressive gross profit margin of 75.26%.
The firm’s analysts brought attention to the recent performance of Bristol-Myers Squibb’s stock, which has seen a significant increase, outpacing the S&P 500 index with a 43% rise since July 1, 2024. This surge has brought the company’s shares to trade at approximately 10 times its estimated 2026 earnings per share, compared to its peers Merck (NSE:PROR) & Co. Inc. (NYSE:MRK) and Pfizer Inc. (NYSE:PFE), which trade at 8 to 9 times their respective estimated earnings.
Despite the positive developments, the analysts expressed caution regarding the potential risks and rewards associated with the upcoming launch updates for Cobenfy and the ADEPT trial data. They suggested that any shortcomings in these areas could lead to doubts about the company’s growth trajectory as the decade ends. The stock’s relatively low volatility (Beta of 0.41) and strong free cash flow yield, as highlighted by InvestingPro, may provide some stability during this period of uncertainty.
In other recent news, Bristol-Myers Squibb is gearing up for its first-quarter 2025 earnings release, with analysts closely monitoring the company’s financial performance amid several challenges. UBS has lowered its price target for the company to $54, citing potential impacts from inventory reductions and changes to Medicare Part D affecting drug sales. Despite these headwinds, UBS projects first-quarter sales for Eliquis and Revlimid to slightly exceed consensus expectations. Meanwhile, Goldman Sachs maintains a Neutral rating with a $55 target, highlighting challenges like generic competition and Medicare redesigns impacting Bristol-Myers Squibb’s legacy products.
The company’s recent Phase 3 ODYSSEY-HCM trial for Camzyos did not meet primary endpoints, impacting its potential market for non-obstructive hypertrophic cardiomyopathy. However, analysts note that Camzyos remains effective for obstructive hypertrophic cardiomyopathy, with no new safety concerns. BMO Capital Markets also holds a Market Perform rating with a $61 target, emphasizing the need for positive outcomes in future trials to support growth.
Additionally, investors are watching the upcoming Phase 3 ARISE trial for Cobenfy in schizophrenia, which could influence the company’s strategic direction. Bristol-Myers Squibb’s ability to balance the erosion of legacy products with new growth drivers remains a focal point for analysts and investors alike.
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