On Tuesday, CFRA downgraded shares of Bristol-Myers Squibb Co. (NYSE:BMY) from Buy to Hold, maintaining a price target of $60.00. The firm cites the stock's significant rally since their Buy recommendation in July, with an appreciation of nearly 21%, as a reason for the reevaluation.
The stock's impressive 47.31% gain over the past six months and current trading near its 52-week high of $61.08 support this cautious stance. According to InvestingPro analysis, BMY is currently trading close to its Fair Value, suggesting limited upside potential.
The downgrade comes despite CFRA's view that Bristol-Myers Squibb is well-positioned for growth following the U.S. approval of Cobenfy (KarXT) for the treatment of schizophrenia in adults. The firm acknowledges the drug's significant market potential but suggests that the current share price reflects this positive development.
With a market capitalization of $119.2 billion and a notable 4% dividend yield, BMY has maintained dividend payments for 54 consecutive years, demonstrating strong shareholder returns despite market fluctuations.
CFRA has retained its 2024 earnings per share (EPS) estimate for Bristol-Myers Squibb at $0.94 and has slightly lowered its 2025 EPS projection to $7.13 from $7.18. The adjustment reflects a conservative approach to the company's financial outlook. InvestingPro data reveals that 13 analysts have revised their earnings downward for the upcoming period, suggesting broader market caution about near-term performance.
The firm's valuation of Bristol-Myers Squibb shares at $60.00 is set at 8.4 times their 2025 EPS view. This target is a discount to the company’s 10-year historical forward P/E average, indicating a cautious stance on the stock's future performance.
The analysis also points to challenges for Bristol-Myers Squibb, including the anticipated loss of exclusivity for its key blood thinner, Eliquis, which generated $3 billion in Q3 sales and accounted for 25% of total revenue.
Additionally, CFRA expects continued sales erosion for another significant drug, Revlimid, which brought in $1.4 billion in Q3 sales, representing 12% of the company's total revenue.
Despite these challenges, the company maintains a robust gross profit margin of 75.87% and generated total revenue of $47.44 billion in the last twelve months.
For deeper insights into BMY's financial health and future prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.
In other recent news, Bristol-Myers Squibb has seen significant developments in its financial and clinical performance. The company's third-quarter earnings exceeded expectations, prompting Bernstein SocGen Group to raise the company's price target from $56.00 to $62.00. This was largely due to the strong performance of key growth products in its portfolio, including CAR-T therapies, Breyanzi and Abecma, and cardiovascular drug, Camzyos.
The company's drug, repotrectinib, has been recommended for approval by the European Medicines Agency's Committee for Medicinal Products for Human Use for the treatment of ROS1-positive advanced non-small cell lung cancer and certain advanced solid tumors. This recommendation is based on the outcomes of the TRIDENT-1 and CARE clinical trials.
Furthermore, Leerink Partners recently upgraded Bristol-Myers Squibb's stock from Market Perform to Outperform and increased the price target from $55.00 to $73.00, based on the anticipated performance of Cobenfy and milvexian. Similarly, BMO Capital raised its price target for the company from $57.00 to $61.00, highlighting the potential of Cobenfy in the market.
Moreover, Bristol-Myers Squibb has made strides in clinical trials, with the FDA approving Cobenfy, a new treatment for schizophrenia, and reporting promising news about milvexian. The company also recently acquired Karuna Therapeutics (NASDAQ:KRTX), aiming to enhance long-term growth with ongoing trials in schizophrenia and Alzheimer's. These recent developments underscore Bristol-Myers Squibb's commitment to growth and innovation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.